OPEC Committee Recommends Extending Output Cuts Beyond March
By Andy Webb-Vidal
OPEC Committee Recommends Extending Oil Output Cuts (Update1)
Vienna, Jan. 14 (Bloomberg) -- The Organization of Petroleum
Exporting Countries should extend oil output cuts beyond their
current expiry in March to ensure prices remain near nine-year
highs, an OPEC committee said.
The production cuts, which have caused the oil price to more
than double in a year, should be kept because world oil
inventories are still too high, OPEC's Ministerial Monitoring
Committee said.
``In light of the continuing market volatility and the
remaining high stock levels, all those present at the meeting
agreed to strongly recommend the extension of the current
agreement,' said Fernando Garay, an OPEC spokesman.
Crude oil rose as much as $1.41, or 5.3 percent, to $28.10 a
barrel in New York, its highest price since January 1991. OPEC
accounts for about 40 percent of world oil supply.
``Now we have suffered so much from the low price,
I'm not worried about the high price' said Bijan Namdar Zanganeh
oil minister for Iran, OPEC's second-biggest producer, a member of
the committee.
Zanganeh said a decision on how long any extension of the
cuts should last would be taken at a meeting in March.
The recommendation from the MMC, which reviews how closely
OPEC members have followed their program of restricting output
cuts, follows similar calls by the group's top producers,
including the world's biggest supplier, Saudi Arabia.
OPEC made almost 80 percent of the cuts they promised in
December, Garay said. A Bloomberg survey estimated the 10 members
of OPEC that are parties to the agreement to limit output made 82
percent of their promised cuts in December, down from 85 percent
in November.
All OPEC nations except Iraq had agreed to trim output by
4.316 million barrels a day, or about 6 percent of world supply,
from February 1998 levels. They made cuts of 3.532 million barrels
a day in December, the Bloomberg survey of producers, oil
companies and analysts showed.
Before the meeting, Zanganeh said he expected a consensus
among OPEC members to renew the quotas, which are due to expire at
the end of March, until the end of September.
``We think we are going to get a unanimous decision,' he
said. |
