Saudi says new oil output cuts will work this time
04:51 a.m. Mar 20, 1999 Eastern
By Edmund Blair
ABU DHABI, March 20 (Reuters) - Saudi Arabia's oil minister
said on Saturday that an agreement by key producers to cut oil
output will succeed in boosting prices even though previous
attempts had failed because the latest pact was backed by top
government officials.
''The reason that this one will probably succeed even more than
previous resolutions is the fact that this decision is suggested and
backed and directed by the highest authority in every government
that has participated in the decision process,'' Saudi Oil Minister
Ali al-Naimi said.
Naimi, whose country is the world's largest oil producer and
exporter, was speaking to reporters during the opening of a
one-day meeting of oil ministers from Saudi Arabia, Qatar, Kuwait
and Bahrain ahead of the March 23 meeting of the Organisation of
the Petroleum Exporting Countries (OPEC) in Vienna.
But Naimi would not comment about where he expected prices to
go as a result of the agreement reached last week to cut global
output by more than two million barrels per day, or almost three
percent of daily output, from April 1.
''I keep saying we are not in the business of predicting what prices
are. We have said our desire is to attain a price of between $18
and $20 per barrel'' for U.S. benchmark West Texas Intermediate
which hovered around $15.25 on Friday.
In Vienna, Saudi Arabia and the 10 other OPEC members are
expected to seal an accord reached last week in The Hague for a
supply cut of just over 1.7 million barrels a day. Non-OPEC
suppliers will make a further 286,000 bpd contribution.
The economies of member nations of OPEC, which accounts for
more than half ot the world's oil exports, have been hard-hit by
months of weak oil prices amid a glut of supply and sluggish
demand. The drop in the price cost OPEC more than $50 billion
in lost export revenues in 1998.
Oil prices, which hit 25-year lows late last year, failed to stage a
recovery despite two previous rounds of supply cuts.
UAE's Oil Minister Obaid bin Saif al- Nasseri told reportres the
Abu Dhabi gathering was for consultation.
He said that it was important to '' coordinate the positions of our
countries.''
Copyright 1999 Reuters Limited. |
