The organisation of Petroleum Exporting Countries yesterday signalled it was poised to cut production in an attempt to revive the flagging oil price. The development came just two days after Opec indicated that it did not consider it necessary to alter production.
Fears of the impact of a global recession on demand for oil, exacerbated by expectations of lower demand from the aviation industry following the US terrorist attacks, have taken the oil price to a two-year low.
Ali Rodriguez, Opec's general secretary, told the Bloomberg newswire that oil production could be cut by as much as 4.3 per cent, or 1 million barrels a day, to boost prices. "We have to analyse very carefully before making any kind of decision. I am receiving the opinions of the different member states and then there will be a decision," Mr Rodriguez said.
According to industry analysts, a move could come before Opec's next scheduled meeting on 14 November. The organisation has already reduced production by 3.5 million barrels this year with three cuts.
The American Petroleum Institute lent a further boost to the oil price after it said US crude oil stocks unexpectedly fell last week by 1.1 per cent, sending the price of November Brent crude futures in London up 57 cents to $22.45.
Opec's oil price target is $25, within a $22 to $28 range.