Oil ministers to meet on output cuts
Tuesday, October 28 2003 - 12:30 AM WIB
The meeting with Saudi Arabia's Oil Minister Ali Naimi and Mexico's Felipe Caldron will occur before the Dec. 4 gathering of the OPEC, Venezuelan Oil Minister Rafael Ramirez said. No exact date or location has been set.
Ramirez said there is no reason for OPEC to raise its output at the next meeting, and OPEC may need to reduce output in order to avoid a price crash in early 2004.
"We don't believe it is necessary to increase output," Ramirez said. "But leaving output unchanged is the other option, but certainly no increase."
In September, OPEC lowered its output ceiling by 900,000 barrels a day to 24.5 million barrels starting in November.
Oil prices have risen around 13 percent since then, but the group fears rising oil supply outside the cartel and a return of Iraqi exports may hurt oil prices in early 2004.
Some OPEC members say they won't reduce output if independent producers do not. The cartel is trying to convince major independents like Mexico to cut production, possibly in January. Einar Steensnaes, minister for petroleum and energy of Norway, also not an OPEC member, met with Ramirez in Caracas on Monday.
Norway and Mexico see no need to reduce production under current market conditions but both have indicated they could join an OPEC production cut if the market changes.
Venezuela and Saudi Arabia ? OPEC members ? along with Mexico brokered a 1999 deal to cut output, eventually leading to a recovery of global oil prices.(*)