OPEC will likely reduce production if oil prices continue to sag
OPEC will likely reduce oil production by a million barrels a day starting in January if crude prices continue to go down, Kuwait's oil minister said in an interview to come out Monday.
"OPEC members will examine a decrease in production at their next meeting, January 17 in Vienna, if prices continue to sink at the current rate," Sheikh Saud Nasser al-Sabah told the Kuwaiti newspaper al-Rai al-Am.
"It is almost certain that an agreement on a reduction in production will be reached during the meeting," he said.
"About one million barrels a day will be taken away if it is necessary, especially with the coming of spring and summer, which bring a reduction in consumption levels and the worldwide demand for oil," Sheikh Saud said.
Oil prices made a surprise slip of nearly five dollars a barrel over the past week even though Iraq has not resumed exports of oil suspended December 1.
The price of Brent North Sea benchmark crude closed Friday in London at $26.56 dollars a barrel for January delivery.
Calling the upcoming OPEC meeting "decisive," Sheikh Saud said oil-producing countries were "determined to assure stability on the international oil markets and to maintain the prices at rightful levels that guarantee the interests of both producers and consumers."
In remarks published December 4, Sheikh Saud rejected any overall new increase in production in light of Iraq's blocked exports, saying other OPEC members could compensate.
Baghdad, which was exporting 2.3 million barrels a day, hinted Saturday it may soon resume exports, halted after a row with the United Nations over a pricing formula.
The 11 members of the Organization of Petroleum-Exporting Countries (OPEC) boosted production four times over the past year in an effort to reduce oil prices that had gone beyond $35 a barril for the first time since the 1991 Gulf war.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)