Friday March 12 3:10 AM ET
OPEC Agrees On Production Cuts - WSJ
NEW YORK (Reuters) - Major oil producing nations moved closer to reducing global
petroleum production and agreed to an initial, immediate cut of 305,000 barrels a day and
continuing talks on a much larger reduction, the Wall Street Journal reported in its March 12
issue, citing people close to OPEC.
Oil ministers from OPEC producers Saudi Arabia, Venezuela, Iran and Mexico held a surprise
meeting in Amsterdam Thursday in hopes of an agreement to cut production by two million
barrels a day, or about 2.6 percent of world output, the newspaper said.
Adrian Lajous, the head of Mexico state-owned oil company Petroleos Mexicanos, said he was
confident an agreement would be reached Friday when the group was scheduled to reconvene.
However, a wire service report, citing OPEC sources, said Saudi Arabia had agreed in
principle to cut by at least 500,000 barrels a day for the larger reduction, the newspaper said.
A final agreement will be paved at the OPEC meeting in Vienna on March 23.
The initial pact to cut 305,000 barrels a day is meaningful because it would appear to resolve a
battle between Saudi Arabia and Iran over last year's unsuccessful cutback agreement, the
newspaper said.
Under the new plan, the members of the Gulf Cooperation Council, which includes Saudi
Arabia, Kuwait, the United Arab Emirates, Qatar, Oman and Bahrain, will each cut their own
output to account for the disputed Iranian production.
As a result, Iran has agreed to cut an additional 200,000 barrels daily for the larger accord, the
newspaper said, citing a wire service report.
dailynews.yahoo.com
Friday March 12 6:26 AM ET
Oil Up As Producers Promise Big Cuts
LONDON (Reuters) - World oil prices moved higher early Friday as an emergency producers'
meeting declared that a big output cut deal was imminent to lighten world oversupply.
International benchmark Brent was up 42 cents at $12.60 a barrel, regaining ground lost late
Thursday as a first day of talks broke up inconclusively.
Saudi Arabia's Oil Minister Ali al-Naimi said that he expected the five producer powers
meeting in The Hague to come up with an agreement later Friday.
''It is a significant cut. It will definitely remove the glut and would definitely improve the
price,'' he said.
OPEC members Saudi Arabia, Iran, Venezuela and Algeria, together with non-OPEC Mexico
were discussing new output cuts of 1.5 million to two million barrels per day (bpd), a Mexican
official at the talks said.
This would be buttressed by a further 305,000 bpd of reductions to cover for previous cuts not
implemented by Iran. Tehran has now convinced other producers that the baseline for those cuts
was overestimated.
Prices have already got a tonic from the renewed producer efforts and are now back near their
highest level since early November, some $3 above 25-year lows in real terms set late last year.
''This is good for the supply-demand balance but it does raise expectations, and the question as
always with OPEC is can they translate words into deeds,'' said a London futures broker.
Moderate compliance with existing three million total producer cut package helped pressure
prices to the historic lows.
The Mexican official said that the ministers were trying to strike a balance between ''a
spectacular new agreement to boost oil prices and one that was realistic enough for oil markets
to find credible.''
Any new agreement is expected to involve all 10 OPEC members already linked in a 2.6 million
bpd cutback deal, and will need approval from OPEC's ministerial meeting on March 23 in
Vienna.
Saudi Arabia is ready to take on a quarter of a new cuts, potentially sacrificing 500,000 bpd as
part of a two million bpd total reduction, a Gulf source said. Riyadh would also take a large
share of the extra cuts to accommodate Iran, he added.
Non-OPEC Mexico, Norway and Oman, which also agreed to restrain output last year, are again
expected to be involved in the new deal.
Norway's Oil and Energy Minister Marit Arnstad said Friday that Norway might consider
deeper cuts if an agreement was reached in The Hague.
dailynews.yahoo.com
Oil was down a bit yesterday.
oilworld.com
If this whole deal hinges on Venezuela's cooperation, forget it. At least early this morning, traders are putting that aside.
Charles |
