The Organisation of Petroleum Exporting Countries has agreed to keep oil production at its current level despite a slump in the price of crude, but said it would act if the price did not stabilise soon.
The Organisation of Petroleum Exporting Countries has agreed to keep oil production at its current level despite a slump in the price of crude since the terror attacks in the United States this month.
The ministers are trying to reassure western powers that they would avoid action that would harm a global economy still affected by the attacks in New York and Washington on September 11.
Opec’s official output is 23,2 million barrels a day and the group supplies almost 40 per cent of the world’s oil. The ministers, who finished their talks in Vienna on Thursday, plan to meet again on November 14 when they hope the political and economic climate will be calmer. Opec has already cut back production three times this year.
The ministers said their target price was still R212 a barrel and they did not rule out the possibility of adjusting output before the November meeting if the price continues to drop. “We hope not to be forced into that,” said Obaid bin Saif Al-Nasseri, oil minister for the United Arab Emirates. The price of North Sea Brent crude was at R193 a barrel on Thursday afternoon, it was at R183 on Wednesday. A fall below R181 would take prices to their lowest in nearly two years.
Opec president Chakib Khelil said the cartel would apply its automatic mechanism, which cuts supply by 500 000 barrels a day if prices remain below R187 a barrel for 10 consecutive days. “We are prepared to act again as and when necessary in the interest of market price stability either at a full conference or through informal contact among our ministers,” he said.
But Opec said it would resist any action on oil output that would harm the teetering global economy. “Opec is always concerned about the world economy,” Saudi oil minister Ali al-Nuaimi said. “Opec will not take action that would be detrimental to world growth,” he said. “We have never done that in the past and will never do that in the future.”
However, some members of the cartel believe the price will stabilise of its own accord. “Prices will, in the coming weeks, return – I am sure – to an acceptable level,” said Opec secretary-general Ali Rodriguez.