Opec set to approve cut in oil output

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The Independent Online

Opec, the oil producers cartel, looks set to approve a plan to cut oil output by 1 million barrels a day today.

Opec, the oil producers cartel, looks set to approve a plan to cut oil output by 1 million barrels a day today.

According to the Kuwaiti delegation, the 11 member nations will meet again in February amid speculation that there will be pressure for a further cut in output quotas.

Today's decision, which is expected to be formally announced at Opec's meeting in Cairo, will see member nations move to enforce a daily limit of 27 million barrels that was agreed this summer, but has been widely flouted.

Ministers from Kuwait, the United Arab Emirates, Libya, Venezuela and Algeria have urged the group to cut back on excess supply that has pulled prices to four-month lows.

"It looks like everybody supports plans to fully comply and to have maybe an early meeting in the beginning of February," the Kuwaiti oil minister, Sheikh Ahmad al-Fahd al-Sabah, said yesterday after meeting fellow Gulf producers including Saudi Arabia.

Oil prices rose $1 yesterday as traders reacted to a growing chorus from Opec members that ministers should clamp down on oversupply to stem the recent fall in crude prices. The price of Brent crude in London rose 98 cents to $39.67.

It appears that the majority of nations in Opec has succeeded in persuading Saudi Arabia, the world's largest oil producer, to abandon its previous view that no change was necessary today.

Saudi Arabia's oil minister Ali al-Naimi, who has played down fears of a glut, said yesterday he was going to the meeting with an open mind.

The Nigerian adviser on petroleum, Edmund Daukoru, said: "Overproduction has achieved its purpose of bringing the price down. It was not meant to crash the price, it was meant to moderate the price."

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