Saudi Oil Minister Ali Naimi said on January 22nd that he expects OPEC’s decision on January 17th to cut production by 1.5 million b/d to result in a net reduction of only 1.2-1.3 million b/d because several members had been producing below their quotas.
Naimi said that: “My guess is that if we have 100 percent compliance, we will probably obtain a net cutback of around 1.2-1.3 million b/d because some of the reductions are going to be from quota levels that were never achieved.”
He added that: “Maybe that would explain why some people were pushing for cuts of 2 million b/d or thereabouts.” The Saudi minister also said he hoped that further production cuts would not be necessary in 2001.
He said that: “Actually, I would like to see that this 1.5 million b/d cutback would be it for the year.
I certainly hope that we don’t have to go through another reduction.” Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah, however, said that OPEC was prepared to consider another reduction if crude prices dropped.
Sheikh Saud said on January 22nd that: “We are watching the market. If the oil price falls below what we expect, then that [a further OPEC cut] is one of the recommendations.”
Mexican Oil Minister Ernesto Martens indicated over the weekend that his country would not cut production in conjunction with the cartel as it had previously done.
Martens suggested that Mexico would support OPEC instead by not raising its own production or tapping its recent 200,000 b/d increase in capacity.
Non-OPEC Norway had also refrained from slicing production following OPEC’s latest move, saying that the market did not warrant such an action.
© 2001 Mena Report (www.menareport.com)
