Brown condemns OPEC move to cut supply
10/17/2008 2:9 PM ET
British Prime Minister Gordon Brown said it was "absolutely scandalous" that the Organization of Petroleum Exporting Countries (OPEC) is planning a meeting to consider cutting oil production in a move to drive prices higher.
Accusing the oil cartel of manipulating prices, he said his government would "certainly try and prevent this happening."
It is feared that a ministerial-level meeting of OPEC members will vote to reduce supplies to reverse the trend that has seen a sharp fall in oil prices lately. Worries about weakness in the global economy, spurred by the recent financial crisis, have pushed oil prices to around $70 per barrel, well off the all-time high of more than $140 set earlier this year.
Oil prices rebounded Friday above $71 a barrel on speculation that next week's emergency meeting of the crude producers' cartel may decide to reduce output.
The OPEC meeting, originally scheduled for next month, was advanced to October 24 to discuss the global financial crisis and its impact on the oil market.
Speaking to business leaders in Nottingham Friday, Brown attributed the price rise to forecasts that said demand would exceed the supply in long-term.
"People thought, looking ahead, that there was no way other than the price going up," he said.
He called upon oil firms to pass on the benefit of price falls to the consumers.
He urged oil giants such as Esso and Total to reduce the price of unleaded petrol to less than a pound for a liter, as done by supermarkets.
Wednesday, Britain's supermarket networks Asda and Morrisons slashed the price of unleaded petrol to 99.9 pence a liter, the first time since last December that petrol has been under £1 - the equivalent of about $1.73- in the country.
Brown said he wants to reduce Britain's dependence on oil. "We don't want to be dependent on unstable regimes or regimes that want to dictate the terms of the oil they are providing for reasons other than commercial."
The retail price rates of petroleum products remain the same in most of the countries even after the global trade prices of crude more than halved from a peak of around $147 per barrel, marked in July.
The almost daily-diminishing prices slashed the cartel's revenues considerably.
OPEC members such as Iran and Ecuador, which are heavily dependent on oil revenues, want production to be cut to minimize the prospect of prices falling any further.
If what Qatar's energy minister Abdullah bin Hamad Al Attiyah said Friday is an indicator, OPEC will cut oil output by at least one million barrels a day, which, in turn, is expected to reflect in an upward trend in prices.
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