OPEC Considering New Production Cut, Rodriguez Says
--These guys are going to pay a price for not taking care of their internal problems. --
(Update1)
By Alex Lawler
London, Oct. 3 (Bloomberg) -- OPEC is discussing whether to cut production quotas for a fourth time this year, concerned that oil prices may ``collapse'' without support from countries outside the group, Secretary-General Ali Rodriguez said.
Ministers are considering whether to enforce an informal accord to reduce supply by 500,000 barrels a day, or 2.2 percent, if OPEC's price benchmark stays below $22 for 10 consecutive trading days. The 10th day will come Friday unless prices rally.
The Organization of Petroleum Exporting Countries needs help from other oil producers to prop prices as recession threatens the world economy, Rodriguez said. While eight non-OPEC producers including Russia and Mexico attended the group's meeting last week, none committed themselves to helping OPEC rein in output.
``We are consulting with other ministers to make a decision (on cutting OPEC quotas),'' Rodriguez said in a telephone interview from the group's Vienna headquarters. ``If there isn't cooperation, world economic growth is very, very low, and we can (expect) a collapse in prices. That is the situation for all producers, not only for OPEC producers.''
While OPEC agreed last week to keep supplies unchanged, officials from Saudi Arabia, Nigeria and Kuwait have since said current price levels could provoke a supply curb before the group's next meeting Nov. 14. The group has trimmed quotas three times already this year by a total of 3.5 million barrels a day.
The so-called OPEC basket, comprised of seven types of crude, fetched $20.30 a barrel yesterday. It fell to a two-year low of $19.87 last week on concern slowing economies will use less energy in the wake of the Sept. 11 terrorist attacks on the U.S.
Benchmark Brent crude in London fell as much as 60 cents, or 2.7 percent, to $21.45 a barrel, its third straight decline. |
