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OPEC ready for deepest oil cut to rescue prices
William Maclean and Barbara Lewis
Reuters
Wednesday, Dec 17, 2008
OPEC oil ministers met on Wednesday to remove a record 2 million
barrels per day from oil markets in a race to balance supply with
the world's rapidly crumbling demand for fuel.
The 12 members of the Organization of the Petroleum Exporting
Countries were also aiming to build a floor under prices that
have dropped more than $100 from a July peak above $147 a barrel.
As the ministers convened a meeting which was expected to proceed
smoothly, oil was trading just above $44 a barrel.
Saudi Arabia, the world's biggest oil exporter, has led by example
-- reducing supplies to customers even before a cut has been agreed
to help push prices back toward the $75 level Saudi King Abdullah
has identified as "fair."
(ARTICLE CONTINUES BELOW)
Ali al-Naimi, the kingdom's oil minister, was first to publicly
call for curbs of 2 million bpd ahead of the meeting.
"The purpose of the cut is to bring the market into balance
and avoid the gyrations of the price," he said. "The
cut may lead to higher prices or may not."
Others in the group that pumps more than a third of the world's
oil said at least two million barrels needed to go from daily
output to prevent a massive build in inventories.
"A minimum of two million we think needs to be cut so we
can balance the market," Iraqi Oil Minister Hussain al-Shahristani
told Reuters.
Full
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