VIENNA (AFP) – OPEC President Chakib Khelil said Thursday that the oil producers’ cartel will decide to cut production at an emergency meeting due in Vienna but was wary of worsening a global financial crisis.
“We are going to reduce (output on Friday). By how much? We don’t know. This is something we are going to decide tomorrow,” Khelil, who is also the energy minister of OPEC member Algeria, told reporters in Vienna.
“It’s a concern that we could make the financial crisis worse by taking too strong a reduction,” said Khelil, adding however that the decision “should not impact the world economy which is already in pretty bad shape.”
Iran — OPEC’s second biggest oil exporter — and Libya both called for a reduction of two million barrels per day, while Venezuela said there should be a cut of at least one million barrels.
British Prime Minister Gordon Brown recently said that any reduction made in a bid to push up oil prices would be “scandalous” at a time when major economies are close to recession.
The price of New York oil dived Thursday to a 16-month low, as recession fears stoked concerns about falling crude demand, traders said.
New York’s main contract, light sweet crude for December delivery, sank as low as 65.90 dollars per barrel — a level last seen on June 13, 2007.
Crude futures in New York and London have plunged 56 percent from record highs of above 147 dollars a barrel reached only three months ago when supply concerns sent prices soaring.
“The market focus today (Thursday) and particularly tomorrow will be on the OPEC emergency meeting,” said analysts at Barclays Capital in London.
“Indicating the inevitability of a substantial cut, Chakib Khelil, the OPEC president, commented yesterday that ‘the stocks are very high… some of us are not able to sell the crude.'”
The Organization of Petroleum Exporting Countries produces 40 percent of the world’s oil and its official output quota stands at 28.8 million barrels per day.
Saudi Oil Minister Ali al-Nuaimi refused to be drawn on talk of a scaling-back to output as he arrived in the Austrian capital on Thursday.
However Libya’s Oil Minister Shukri Ghanem told reporters that “a huge cut” of “two million barrels” was required to create a balance between supply and demand.
Venezuelan Energy Minister Rafael Ramirez said there should be a cut of at least one million barrels. Ramirez added that he believed there was a consensus among OPEC’s 12 members for a cut.
OPEC’s Gulf state members led by Saudi Arabia, the world’s biggest oil exporter, are expected to oppose a reduction of more than one million barrels, analysts said on Thursday.
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