Oil Ministers Set Market Stability as Goal

Oil ministers from Saudi Arabia, Venezuela and Mexico agreed at a meeting Sunday to take “any measure needed” to ensure a stable international oil market for producing and consuming nations.

“The ministers agreed to continue monitoring market fundamentals and adopt any measure needed, in a timely matter, to ensure a stable and adequately supplied oil market,” a statement issued after the meeting said.

Venezuelan Oil Minister Alvaro Silva met with Ali Ibrahim Naimi, oil minister for Saudi Arabia, and Ernesto Martens, his Mexican counterpart, in Geneva as part of a campaign to persuade non-OPEC members to reduce production to boost oil prices.

Saudi Arabia, Venezuela and Mexico, which is not a member of the Organization of Petroleum Exporting Countries, have consulted on oil policy since 1998, helping to lift prices from less than $10 a barrel in December of that year. They are among the top five suppliers to the United States, the biggest oil consumer.

OPEC last week agreed to cut daily supplies from Sept. 1 by a million barrels, or 4.1%, after its oil price benchmark fell 13% from June 1 to July 24 as inventories rose and an economic slowdown curbed demand.

Mexico said earlier this week it would reduce its exports by 70,000 barrels a day next month as part of OPEC’s decision.

The ministers said OPEC’s decision was timely, “given the slowdown of the world economy and its effect on market fundamentals,” the statement said.

“Over the past few months, demand has continued to fall while supply has been rising,” the statement said. “The market has shown signs of entering a new cycle of instability, which has warranted this timely action.”

The ministers “made an appeal to major oil producers to continue to cooperate in the effort to maintain the stability” of oil prices, the statement said.

Among other non-OPEC producers, Oman and Russia have offered support for OPEC’s cuts this year, though they haven’t announced any specific measures of their own. Russia companies, such as its No. 2 producer AO Yukos Oil Co., have been busy increasing oil production this year.

OPEC has already cut output twice this year. Mexico didn’t participate, saying it was concerned higher oil prices would damage the global economy and lower demand for Mexican exports such as cars and computers.

Oil accounts for less than 10% of Mexico’s exports, though it can account for 90% of government income in OPEC countries.