Mexico - Kuwait: Deja vue, all over again.
Energy News
Sun, 6 Jun 1999, 1:22pm EDT
Kuwait, Mexico Say Oil Output Cuts Will Boost Prices in June
Kuwait, June 6 (Bloomberg) -- Kuwait, the seventh largest
oil producer in OPEC, and Mexico said the ''significant level''
of compliance with a pact by world oil producers to cut output
would drive prices higher in the coming weeks.
Kuwait's oil minister Sheikh Saud Nasser al-Sabah and his
Mexican counterpart Luis Tellez met today to review a March
agreement by the Organization of Petroleum Exporting Countries'
and four other producers, including Mexico, to cut world oil
supply by more than 5 million barrels a day in order to boost
oil prices which hit a 12-year low in December.
Mexico, which is not a member of OPEC, and Kuwait said it
was ''of crucial importance'' that producers maintain full
compliance to output cuts, and they ''stressed the need to
maintain vigilance to achieve the desired improvement in oil
prices,'' the ministers said in a joint statement.
Oil producers, who failed on two occasions last year to
stop prices from dropping to under $10 a barrel in December,
believe an oil price in the $18- to $20-a-barrel range is a fair
price --high enough to avoid causing economic hardship in
producing states, and low enough to avoid recessions in
consuming states.
Brent crude oil for July delivery rose 63 cents, or 4.2
percent, to close at $15.58 a barrel in London on Friday on the
International Petroleum Exchange.
The two oil ministers, who reconfirmed their commitment to
a series of agreements to cut output dating back to April 1998,
said they ''would continue cooperation in taking all necessary
measures, in conjunction with other oil producers, to ensure oil
market stability.''
OPEC made 91 percent of their promised oil cuts in May,
according to a Bloomberg survey of producers, oil companies and
analysts showed.
Production from all 11 members of OPEC totaled 25.9 million
barrels a day in May, down 370,000 barrels from a revised 26.3
million barrels a day in April, the survey said.
The Mexican oil minister's meeting in Kuwait today followed
a similar summit in Riyadh on Saturday with Saudi Arabia's oil
minister Ali al-Naimi, where the two ministers said they would
be willing ''to take whatever action was needed to stabilize the
market and improve oil prices.''
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