here is another Bloomberg article
Sun, 11 Apr 1999, 1:04pm EDT
World Oil Producers Aim for $21 a Barrel With Output Reduction, Egypt Says
Cairo, April 11 (Bloomberg) -- World oil producers cut
global supply last month by 2.7 percent in order to remove an
oil glut and boost prices to a target level of $21 for a barrel
of Brent crude, Egypt's oil minister said.
Hamdi el-Banbi said, ''Oil producers are in continued
contact to forge a strategy to further raise oil prices,''
Qatar's official news agency reported. He did not say if Egypt,
which last year cut its output by 30,000 barrels per day to
820,000 barrels a day as part of a failed effort by oil
producers to boost prices, would be willing to join in the
latest round of output cuts. Egypt is not a member of OPEC.
Oil exporters have lost billions of dollars from low prices
during the last 16 months, forcing the members of the
Organization of Petroleum Exporting Countries' to end their
disputes and agree to cut output in March for the third time in
12-months. Last year OPEC and other exporters promised to cut
3.2 million barrels of daily output, though failed to comply
with their quotas and boost prices.
In London on Friday, May Brent crude rose 4.6 percent to
$14.86 a barrel on the International Petroleum Exchange after
the International Energy Agency said world production fell short
of demand for the first time in more than two years. By the end
of the year, a supply surplus that sent prices to 12-year lows
in December could be gone as the world is pumping 450,000
barrels a day less than it needs, the agency said.
Analysts said they are optimistic that the new round of
cuts would remove the global oil glut.
''The reduced quantity will be adequate to balance the
supply with the demand and to absorb the market surplus,'' said
Jassem al-Saddoun, an oil analyst with the Kuwait-based AL-Shall
economic research center. ''However, the markets will await the
extent of compliance, with production data for April expected to
have an important impact on oil prices,'' he said.
If producers only achieve 85 percent of their cuts in the
second half of 1999, inventories should fall 350 million
barrels, the IEA said, adding that many analysts say the global
oil surplus is between 300 million and 400 million barrels.
OPEC only met 78 percent of its promised oil output cuts in
March. |
