Tuesday June 23, 3:30 pm Eastern Time
OPEC Wants To Cut 1M Barrels a Day
By DIRK BEVERIDGE
AP Business Writer
VIENNA, Austria (AP) -- Leading OPEC ministers said Tuesday they want to remove
more than 1 million barrels of oil a day from the world's glutted market, where prices hit
12-year lows this month.
A slash of that size would almost double the cuts six OPEC nations have already
promised. Futures traders responded by pushing prices higher in New York and
London.
''We're all discussing further cuts,'' Kuwaiti oil minister Sheik Saud Nasser al-Sabah
said after talks with Saudi oil minister Ali Naimi.
The Saudis, who have the biggest production, indicated they would consider reducing
their output by more than their initial pledge of 225,000 barrels a day, which was
proportionately smaller than the promises of some other OPEC states.
But nobody has said publicly how many extra barrels the Saudis, or for that matter any
other producer, should take off the market.
Iran has proposed across-the-board cuts of 10 percent, starting from February
production levels. The United Arab Emirates would go along with that, its oil minister,
Obaid bin Saif al-Nasseri, said Tuesday.
OPEC got itself into trouble in the winter when it flooded the market with crude just as
the Asian economic crisis began choking off demand.
Sheik Saud, the Kuwaiti minister, said OPEC should cut more than the 1.245 million
barrels a day it pledged at an emergency session in March.
Despite the pledge, OPEC delivered a cut of less than 1 million barrels a day, and
prices plunged further. OPEC's average price fell below $11 per barrel last week,
though it is slightly higher now.
The cheap oil is a bargain for consumers but awful news for OPEC and other producers
who think they should be getting somewhere between $17 and $20 a barrel.
Heading into Wednesday's OPEC session, members have so far promised new cuts
that would equal 620,000 barrels a day, beginning July 1.
Non-OPEC members including Mexico, Russia and Oman have chipped in to raise the
pledge to 823,000 barrels.
But many producers are talking about more severe cuts.
''Personally, I think we need 1.3 million barrels a day,'' said Luis Giusti, the president of
Venezuela's state oil monopoly, Petroleos de Venezuela SA. Giusti was referring to
cuts from OPEC and non-OPEC.
Brent crude oil to be delivered in August was up 42 cents at $13.66 today on London's
International Petroleum Exchange in London, adding to gains of 39 cents from
Monday's session.
Light sweet crude oil for August was up 53 cents at $14.18 a barrel around midday on
the New York Mercantile Exchange, also adding to gains from Monday.
Members of the Organization of the Petroleum Exporting Countries are Algeria,
Indonesia, Iran, Iraq, Kuwa it, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab
Emirates and Venezuela. |
