|
December 12, 2004
Cairo, Egypt (Xinhuanet) December 10, 2004 - The
Organization of Petroleum Exporting Countries (OPEC) agreed
Friday to reduce crude supplies by one million barrels
a day from the beginning of next year to
avoid further slide in oil prices.
"(OPEC) Member countries have agreed to
collectively reduce the over-production by one million barrels
per day from their current actual output, effective
on January 1, 2005," the 11-member bloc said in a
statement at the end of its ministerial meeting held in Cairo.
OPEC ministers also decided to keep its total output
quota of 27 million barrels per day unchanged.
The decision showed OPEC is trying to prevent the oil
price from receding too far after it reached a peak at more
than 55 US dollars a barrel in late October, which prompted
many oil producers to call for cutbacks in supply.
"During past weeks, the oil prices have
fallen sharply. We should take action to stop
it, and the first step is cutting the surplus output
and the quotas should be obeyed strictly,"
said Kuwaiti Energy Minister Sheikh Ahmad Fahd al-Sabah.
Algeria's Energy Minister Chakib Khalil echoed the idea,
saying: "The downward trend seemed to us to be a
bit too rapid, and it appeared that if we did not
take this sort of decision the prices would not stabilize and
we would find ourselves in a situation where we couldn't
control the stability of the market."
Top OPEC producer Saudi Arabia will shoulder half the
total cut. The kingdom's planned 500,000 barrels per day
reduction would bring its output to around 9 million bpd --
still around 225,000 bpd above its quota.
OPEC Secretary General Purmono Yusgiantoro of Indonesia
called for stability in the oil markets after months of
"excessive speculative activity".
He said the group would reassess its current price band
at the next meeting on January 30, 2005, in Vienna, Austria,
which will review market developments as oil prices are
expected to come under growing pressure during the
"seasonally, lower-demand second quarter".
The decision will disappoint consumer nations that
have urged OPEC not to pull back from current production
levels, because oil inventories must be rebuilt to underpin
economic growth and calm volatile prices.
In a bid to ease up fears on possible price hike after
the supply cut, the ministers said that they are committed to
maintaining the stability of the oil market.
"The conference reaffirmed its determination to take
all measures deemed necessary to keep market stability and
maintain prices at reasonable levels, for the benefit of
producers and consumers alike," the statement said.
The OPEC, which supplies about 40 percent of the world's
oil, has been producing at the highest level in 25 years so as
to meet increasing demand in the world market.
Experts say that the bloc is currently pumping one million
to 1.5 million bpd of surplus production over the existing
target quota of 27 million bpd.
However, increasing stocks, slowing economies, high
production by both OPEC and non-OPEC countries and a
relatively mild Northern Hemisphere winter collectively led to
a 25 percent fall in crude prices in the past few weeks.
|
