OPEC Members Likely to Reduce Oil Output

With Saudi Arabia calling for OPEC to cut production, energy analysts say other members of the cartel are sure to agree to tighten their taps to try to reverse the recent slide in oil prices.

Fears of a global recession and dwindling demand for oil will dominate the debate when delegates of the Organization of the Petroleum Exporting Countries meet Wednesday in Vienna.

Venezuelan President Hugo Chavez told a news conference on the sidelines of the U.N. General Assembly’s annual meeting Saturday that the oil cartel’s 11 member countries, including Venezuela, have reached a definite consensus to cut output by at least 1 million barrels a day and perhaps as much as 1.5 million barrels a day.

Several non-OPEC producers have agreed not to increase their production, Chavez said, without naming any countries. Mexico and Norway have publicly demurred, while oil companies in Russia were reported Friday as willing to trim output at some of their wells.

OPEC, which supplies about a third of the world’s oil, already has cut production three times this year. Although demand has continued to weaken, concern that higher prices might intensify the global economic malaise has made OPEC reluctant to cut output again in the aftermath of the Sept. 11 attacks. Last week, however, OPEC has become more assertive, with Saudi Arabia, the group’s largest and most influential producer, expressing support for a decisive cut of as much as 1.5 million barrels a day--or 6% of their official target.

Expectations of a big cut soared Thursday when Saudi Oil Minister Ali Naimi said a decrease in OPEC’s output by 1.5 million barrels, together with a pledge from non-OPEC countries to trim their supplies by 500,000 barrels a day, would be needed to restore balance to world markets.

He dismissed a 1-million-barrel-a-day cut as a joke, and suggested that a cut of 1.5 million barrels a day would be an easy option for OPEC.