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OPEC likely to delay output cut decision to December
11/28/2008


CAIRO (AFP) – OPEC will probably wait until December to decide whether to cut output, ministers said on Friday, ahead of a meeting to review conditions in a market said to be awash with oil.

Organization of Petroleum Exporting Countries ministers are to meet in Cairo on Saturday amid pressure for production cuts to stem heavy oil price losses.

Most cartel members appeared to rule out an immediate reduction, preferring instead to wait until the next scheduled meeting in Oran, Algeria on December 17.

But Libya left the door open for a possible output cut this weekend.

"All options are open... We think that a decision will be taken sooner or later," Oil Minister Shukri Ghanem told AFP.

"We should study figures on supply and demand (and on) the increase in stocks," he said, "but that does not exclude the possibility of a decision" to cut production.

He added, however, that "some (members) think it is prudent to wait until things will be more clear."

Iran, Kuwait, Nigeria and Qatar have indicated that any decision to cut output would be made in December.

Venezuelan Oil Minister Rafael Ramirez said OPEC should cut production by "at least one million barrels" per day before the year's end.

"Maybe we need a cut. But we have to decide when -- if tomorrow or in the next meeting in Algeria," Ramirez told reporters.

Iran's Gholam Hossein Nozari declined to be drawn on the size of a production cut, although Iran has been pushing for a reduction of 1.0-1.5 million barrels per day (bpd).

"Here (in Cairo) we will prepare some data and maybe the final decision will be in Algeria," Iran's Nozari told reporters.

Hawkish Iran is a powerful voice because it is the second-biggest crude producer after OPEC kingpin Saudi Arabia. The Saudis have yet to state their position.

Iraqi Oil Minister Hussein al-Shahristani said that 80 dollars a barrel is a "reasonable" price for oil and that his country would support any decision to cut output "either here or in Algeria."

But Nigeria's Odein Ajumogobia added: "This is a consultative meeting. I don't think there is going to be any earth-shaking decision."

Qatar's Abdullah al-Attiyah said a decision "will likely be taken in Algeria" to cut production to shore up prices.

"We have to discuss the statistics... We will go to Oran. We are here to talk."

Only last month, ministers agreed in Vienna to reduce production by 1.5 million bpd, but the market has continued to slump.

OPEC, which pumps 40 percent of the world's oil, has seen prices collapse by about two-thirds since record highs of around 147 dollars a barrel reached in July. That has slashed revenue for members as a worldwide economic slowdown took hold and ravaged energy demand.

Last week, prices hit their lowest levels since early 2005.

OPEC officials and ministers are also saying the world is awash with more than adequate crude supplies, with Attiyah saying "oil stocks are high... the highest average in the past five years."

OPEC Secretary General Abdalla Salem El-Badri, also in Cairo for the talks, said the "market is over-supplied."

Kuwait's Mohammad al-Olaim said he believes OPEC needs to review more information before taking a decision on production, but added that a decision to cut would probably be taken in Oran.

"There is a surplus on the market and everyone knows that, and the decline in demand is there and it is a big amount... because of the global economic crisis," Olaim said.

Official OPEC output, without Iraq, currently stands at 27.3 million bpd.

In Friday trading, world oil prices closed mixed as traders eyed signs that OPEC would wait until next month before cutting output.

Light sweet crude for delivery in January fell just one cent to 54.43 dollars a barrel on the New York Mercantile Exchange (NYMEX) as trading resumed after markets were shut Thursday for the Thanksgiving holiday break.

On London's InterContinental Exchange (ICE), Brent North Sea crude for January rose 36 cents in late trading to end 53.49 dollars.