Kuwait will not budge from its position calling on the Organization of Petroleum Exporting Countries (OPEC) to make a substantial cut in output to shore up oil prices, a senior oil official was quoted by the Gulf Daily newspaper as saying Sunday.
The official's remarks came after US Energy Secretary Bill Richardson arrived in Kuwait for talks aimed at convincing oil producers not to make severe output cuts in a bid to keep oil prices around $25 a barrel, said newspaper.
There is a real fear the huge rise in crude stocks (with consumers) may lead to a crash in oil prices similar to the collapse in 1998 when oil prices dropped below $10 a barrel, the official told the paper.
"Credible reports indicate that those huge stocks will not run out or drop considerably before next May. Reports also show that currently there is a surplus of 1.8m bpd in the market," he said.
Richardson held meetings in Saudi Arabia, the United Arab Emirates (UAE) and Qatar on the need for oil price stability and the size of a planned output cut, said the paper.
UAE Oil Minister Obeid bin Saif al-Nassiri, after talks with Richardson, called for a "fair price" but declined to specify the scope of the cut to be decided Wednesday at an OPEC meeting in Vienna, said the Emirati News Agency (WAM).
"The UAE is concerned over stability on the oil market but it hopes for a fair and adequate price for producers," Nassiri said.
Richardson said the UAE had agreed to take the US view into account and reiterated that 25 dollars a barrel was a reasonable price target, WAM added.
In Riyadh, Richardson said he had not received an answer from kingdom over the size of the OPEC cutback, following talks with Crown Prince Abdullah bin Abdul Aziz and Oil Minister Ali al-Nuaimi, said AFP.
The outgoing US administration official warned that a large reduction in production would push up prices and have an impact on the world economy, the agency added.
"I have come with a message that oil-producing nations should not act precipitously to make severe cuts in production which would continue the instability that we have seen over the last two years," Richardson said in Riyadh.
However, he said in Qatar that his tour of the region was "not aimed at exerting pressure" on oil-producing countries, according to AFP.
"If OPEC insists on reducing output, the US does not object to small cuts", said Richardson who renewed his plea for a 25-dollar per barrel rate.
According to the agency, Richardson said after the Gulf tour he would meet in London with Venezuela's new energy minister, Alvaro Silva Calderon.
© 2001 Al Bawaba (www.albawaba.com)
