OPEC May Order Another Cut in Crude Oil Production

The Organization of Petroleum Exporting Countries is leaning toward cutting production during a semiannual ministers’ meeting next month, the cartel’s secretary general said Monday.

OPEC Secretary General Ali Rodriguez said global oil demand could drop by 2 million barrels with the onset of warm weather in the second quarter. He added that the cut would not exceed 1 million barrels a day.

“Yes, the inclination . . . was that we need to cut oil, because during the second quarter there’s always a significant decline in oil demand,” Rodriguez said in a radio interview from London.

Rodriguez, Venezuela’s former oil minister, made his statements a day after OPEC President Hugo Chavez met with Saudi Arabian King Fahd and Crown Prince Abdullah during a three-day visit to the OPEC heavyweight. A Venezuelan diplomat said the two OPEC leaders discussed oil market conditions and prices. Chavez will visit OPEC member Qatar on Wednesday.

Under Chavez, Venezuela has become one of OPEC’s most hawkish members. Chavez has recently called for crude oil prices to remain between $25 and $28--the higher end of OPEC’s price band.

OPEC sliced output by 1.5 million barrels a day last month in anticipation of a seasonal decline in demand in the second quarter.

Rodriguez said OPEC would consider new tensions in the Middle East and distribution problems in the United States before deciding whether to cut production further.

He added that OPEC is committed to keeping crude prices within its band mechanism--$22 to $28 a barrel.