OPEC President Rodriguez: OPEC will cut 500,000 bpd automatically in January 8.
OPEC President and Venezuela Energy Minister said Friday to reporters that OPEC will cut automatically 500.00 barrels per day on Jan 8, if prices continue under $ 22.00.
"If these prices continue, below the lower limit of the ($22-28/bbl) price band, all members are in a unanimous accord to automatically cut production in 500.000 barrels per day, on January 8 ".
OPEC's price band mechanism triggers a 500,000 barrels a day increase if the basket price holds above $28/bbl for 20 consecutive trading days, or lower output by 500,000 b/d if the basket price moves below $22/bbl for 10 consecutive trading days.
Rodriguez also said, " in the OPEC meeting Jan. 17, oil ministers will study the whole market situation and a better idea of the evolution of the market, stock levels and the amount of speculation circulating among players, them we will make a decision on further cuts if necessary"
Rodrigues added, on Jan. 17, oil ministers would have a better idea of the evolution of the market."
We are looking very carefully at what is happening in the market - we have to analyze that." And reiterated Venezuela's view that there's a 1.4 million barrel a day oversupply in the market.
Rodriguez will arrive in Vienna to start his new job as OPEC secretary general on Jan. 5 and Venezuelan President Hugo Chavez is expected to name a new Energy minister and some new members of the PDVSA Board of Directors in the coming days.
By Elio Ohep
© 2000 Mena Report (www.menareport.com)