US Energy Secretary Bill Richardson met Saudi Oil Minister Ali al-Nuaimi here Saturday at the start of a four-nation Gulf tour to try to persuade oil producers ahead of their OPEC meeting to limit any output cut.
A US embassy spokesman said the outgoing US administration official was also to hold talks with Crown Prince Abdullah bin Abdul Aziz, whose country is the world's top crude producer and exporter.
The aim of Richardson's tour is to "discuss the world oil situation, and continue his diplomatic efforts to increase world stocks, reduce market volatility, and improve the market situation," the embassy said in a statement.
OPEC president Chakib Khelil said the cartel is expected to decide to cut oil output by between 1.5 and 2 million barrels per day (bpd) at its Vienna meeting on January 17, in an interview published Saturday.
"Qatar's energy minister is speaking of 2 million barrels and the Saudi (oil) minister of 1.5 million barrels. There is agreement that the cut will be between these two figures," Khelil told the London-based Arab newspaper Al-Hayat.
Khelil, who is Algeria's energy minister, said the Vienna meeting would also decide on when the production cut is to take effect and for how long.
"The problem of refined oil products has been resolved, and the United States and Europe should not be worried, because there will be no shortage in the first quarter," he said, adding however that problems could arise in the second three months of 2001.
Khelil said he met Richardson in Paris on Friday and "informed him that OPEC was committed to keeping prices stable at 25 dollars a barrel and to meet any shortage in consumer countries."
For Richardson, who is to travel on to the United Arab Emirates, Kuwait and Qatar, a cut of 1.5 million bpd was "too high" and he proposed that 1 million bpd "could be sufficient," according to Khelil.
"The United States is in favor of a cut in two stages of half a million barrels each time, the first during the first quarter and the second at a later stage," the Algerian minister said.
But "OPEC fears a repetition of what happened in 1998, when prices fell to $10 a barrel because stocks were too high and there was a surplus in supply on the markets," explained Khelil.
Most members of the Organization of Petroleum Exporting Countries have called for a decrease in oil production to offset lower prices as spring approaches in the northern hemisphere.
In New York, crude prices rose above the psychological barrier of 30 dollars a barrel on Friday as the market braced for a hefty OPEC production cut.
Oil Minister Amer Rashid of Iraq, an OPEC member exempted from the cartel's quota system, warned on Friday that the Richardson tour was aimed at weakening the consensus to lower oil production.
"In my view, Richardson's visit will have negative results, as each time political pressures increase on the oil market, crises increase and the price of crude fluctuates," he said. – (AFP, Riyadh)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
