ABU DHABI (March 20, 1999 4:05 p.m. EST
nandotimes.com) - Gulf Arab states have agree to
cut 1 million barrels per day (bpd) off oil output as of
April 1, with Saudi Arabia leading the charge aimed at
boosting prices, Gulf oil ministers said here Saturday.
The Saudi kingdom will chop its own output by
585,000 barrels per day (bpd) as part of an
agreement it reached on March 12 with other major
producers, Saudi Oil Minister Ali Ibrahim al-Nuaimi
announced.
Nuaimi said Organization of Petroleum Exporting
Countries members would cut individual quotas by 7.3
percent and he was joined by his Gulf Arab
counterparts in endorsing the agreement in The Hague
for a total of more than two million bpd in cutbacks.
The new OPEC quota of Saudi Arabia will fall to 7.438
million bpd.
It will be the first time Saudi output drops below eight
million bpd since the 1990 Iraqi invasion of Kuwait,
when the Gulf kingdom made up for the absence of
Iraqi and Kuwaiti oil from the market.
Nuaimi said he hoped the price of West Texas
Intermediate would rise to between 18 and 20 barrels
"in the near future" and voiced "total confidence" that
producers would stick to their pledged cuts.
He means dollars, not barrels.
"This decision is backed by the highest authority of
every government participating in it," Nuaimi told
reporters at the meeting in Abu Dhabi of Gulf oil
ministers ahead of an OPEC conference in Vienna
starting Tuesday.
Emirati Oil Minister Obaid ibn Saif al-Nasseri
announced his country would cut "close to 157,000
bpd" from its OPEC quota of 2.157 million bpd, while
his Kuwaiti counterpart Sheikh Saud Nasser al-Sabah
confirmed a 144,000-bpd cut.
Qatar is to cut output by 47,000 bpd, raising the total
of Gulf Arab cuts including Oman to 996,000 bpd.
Qatari Energy Minister Abdallah al-Attiya, quoted by
the Emirati news agency WAM, hoped that overall cut
by OPEC and non-OPEC states would be "shared in a
fair manner".
"We must avoid getting into bargaining over a barrel
here and a barrel there, because these discussions
harm the market," he warned, adding that the cuts
agreed in The Hague were for a 12-month period.
The Abu Dhabi meeting wrapped up with a statement
of support for the agreement in The Hague between
Algeria, Iran, Saudi Arabia, Venezuela and non-OPEC
Mexico.
The Gulf ministers said they "unanimously endorse
steps taken at the The Hague meeting."
They would "work together to support the agreement
during the upcoming OPEC conference on March 23,
1999, in order to restore stability to oil markets and
improve oil prices."
Since the accord in The Hague, Iran has announced a
cut of 264,000 bpd, while Venezuela and Mexico said
they would each reduce output by 125,000 bpd.
The reductions are to be confirmed in Vienna, where
non-OPEC Gulf producer Oman has also been invited
to join the talks although its oil minister was not in Abu
Dhabi on Saturday.
The cartel's president Youcef Yousfi said Tuesday
that OPEC countries would cut 1.7 million bpd and
non-OPEC producers 400,000 bpd. Oman would
contribute 63,000 bpd and Norway, another
non-OPEC state, 100,000 bpd, he said.
Actually, Norway agreed to cut 200,000 bpd.
Bahrain, the sixth Gulf country, is not an oil exporter.
The economies of Gulf Arab producers, which hold 45
percent of global oil reserves, have been in recession
because of the collapse of oil prices, which dipped last
year to under 10 dollars a barrel.
But the depressed oil market heated up this week as
the price of Brent hit a six-month high and analysts
joined in with forecasts that the reference crude could
rise to 15 dollars a barrel this year.
Stimulated by the announcement in The Hague, Brent
crude ended the week at 13.37 dollars a barrel, up 22
cents, and at one point reached a six-month high of
13.97 dollars a barrel.
nandotimes.com
Crude on the NYMEX is $15 now.
oilworld.com
Nigeria will cut 148, Libya 96, Indonesia 93, and maybe Algeria will cut 58 thousand bpd.
biz.yahoo.com
Norway said it would cut 200,000 but OPEC doesn't seem to be counting on it. If it cuts only 100, then the total of the cuts seems to be 2,005,000 bpd.
biz.yahoo.com
Charles |
