The United Arab Emirates (UAE) said Wednesday that the decision by OPEC to cut its production by 1.5 million barrels per day (bpd) was "adequate" and would not have an impact on the world economy.
"The decision by OPEC to cut its production by 1.5 million bpd is good and adequaate given the excess of one to two million bpd on the market," UAE Oil Minister Obeid bin Saif al-Nassirisaid said in Vienna, according to the official WAM agency here.
"The reduction will not have a big impact on prices and as a result will not have any big effect on the world economy," he added.
OPEC decided Wednesday in Vienna to cut production by 1.5 million bpd from February 1, so as to avoid a collapse in the price of crude.
This cut of 1.5 million bpd represents a drop of some five percent in the production of OPEC (Organisation of Petroleum Exporting Countries) which has been running at 26.7 million bpd.
But that figured excludes Iraq which is not part of the quota system because of the embargo against it following its 1990 invasion of Kuwait.
"The fact of soaking up 1.5 million bpd will allow a balance between supply and demand during this year, so long as no surprises unsettle this balance in the short or medium term," the UAE minister added.
He said that "an agreement has been adopted to reduce production, guarantee a balance on the market and put an end to the substantial fluctuation in prices" of crude.
Asked about the possibility of OPEC deciding on further cuts in March, Nassiri said he thought that "OPEC is ready to adopt necessary measures during its next meeting in light of the situation on the market."
OPEC secretary general Ali Rodriguez of Venezuela said the organisation's ministers reached an agreement to cut production again "if necessary" by one million bpd.
In New York, the price of reference crude (light sweet crude) for February delivery dropped 54 cents to $29.75.—AFP.
©--Agence France Presse.
© 2001 Mena Report (www.menareport.com)
