OPEC Calls for Increase in Cutbacks
The Organization of the Petroleum Exporting Countries, which pumps 40% of the world’s oil, won’t reduce output next year unless non-OPEC producers nearly double the size of their cutbacks, OPEC’s president said.
“The total in production cuts announced so far by non-OPEC countries nears only 300,000 barrels per day and we are still awaiting more efforts,” said OPEC’s Chekib Khalil, who also is oil minister of Algeria, the country’s official APS news agency reported.
The 11-member exporters group has said it is prepared to cut oil output quotas by 6.5%, or 1.5 million barrels a day, beginning Jan. 1 in an effort to boost prices if non-OPEC states, such as Russia, Mexico and Norway, also cut supplies by a combined total of 500,000 barrels a day.
Brent crude oil fell 62 cents to $19.28 a barrel Friday as non-OPEC producers failed to agree to reduce production by the desired amount.
Prices are down 42% from a year ago and 30% since the Sept. 11 terrorist attacks on the U.S. accelerated a global economic slowdown.
Russia, the world’s largest exporter outside of OPEC, has thus far defied the oil group’s call for a large cut in output by agreeing to a token reduction of 0.7%, which analysts have said was too small to avert a glut in the market.
The Algerian oil minister said prices will collapse if producers don’t agree to cooperate, APS reported.
Russia’s oil exports surged this year, even as OPEC reduced quotas by 3.5 million barrels a day to prop up prices.
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