OPEC needs output cut of one million barrels to stop price slide
Iran's OPEC representative said Sunday the cartel should cut production by a minimum of one million barrels per day (bpd) in order to stop the slide in prices worldwide.
"Given the current state of the market, OPEC must reduce production by at least one million barrels a day," Deputy Oil Minister Hossein Kazempour-Ardebili said, cited by state television. But he said the 11-member Organisation of Petroleum Exporting Countries would "probably" opt for a cut of 500,000 bpd on January 8.
"At the formal reunion on January 17 (in Vienna), members might then decide on an additional cut based on their evaluation of supply and demand, the volume of strategic reserves and prices at the time," he said.
Crude prices remained depressed on Friday, with the OPEC basket price down to $21.64 per barrel, tumbling through the $22 floor for the first time in eight months.
Under an informal $22-28 price-band set in March, the cartel agreed to increase or decrease output by 500,000 barrels a day if the price stayed outside the band -- above or below -- for more than 20 days.
OPEC raised production levels four times over the past year to try to soften prices, which at one point hit a 10-year high of more than $35. Iran is OPEC's second biggest producer, with a current output of 3.8 million barrels per day.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)