Opec struggles to agree output cuts

Opec, the oil producers' cartel, will unveil plans to slash production on Monday if its members can come to a deal over the weekend, its president said yesterday.

The Organisation of Petroleum Exporting Countries could hold a meeting as soon as 19 October to sanction a cut in output of a million barrels a day.

Edmund Daukoru, Opec's president, said he was hopeful the 11-nation group would reach a consensus by Monday on supply cuts.

Plans emerged this week to remove 1 million barrels per day, or about 3.4 per cent of total Opec supply, from the market as soon as possible. "By Monday, a consensus will emerge, I hope," Mr Daukoru, who is also Nigeria's top oil official, told Reuters. Opec has not decided whether to hold an emergency meeting on 18 and 19 October at its headquarters in Vienna. "We have discussed the possibility of meeting and have not reached a consensus," Mr Daukoru said. The next scheduled meeting is in December.

Despite his comments, oil prices slipped back below $60 a barrel yesterday as traders cast doubt on the cartel's commitment to follow through on its threat to cut production.

The cost of Brent crude fell to $56 a barrel this week on fears of a sharp US economic slowdown and a build-up on oil inventories. They rose sharply on Thursday after news of the near-4 per cent cut emerged. Yesterday in London, Brent crude for delivery next month fell 32 cents to $59.68.

Frédéric Lasserre, at SG CIB Commodities, said: "It looks like it may take some time for Opec to decide how to allocate this cut, and that is bearish, not bullish."