RI wants OPEC to cut output

Indonesia, Asia's only OPEC member and struggling to pull its economy out of prolonged crisis, said yesterday it would press the cartel to cut production and stop any further slide in oil prices.

Repeated oil output rises by the organization this year have finally taken their toll on prices.

The OPEC basket of seven crudes was US$24.79 on Monday, compared to a peak of just over US$32 in mid-November.

"There seems to be too much oil in the market and it is depressing prices.

Indonesia will propose to OPEC at its next meeting (in January) that it reduce production," Mines and Energy Minister Purnomo Yusgiantoro told Reuters.

Traditionally a moderate among the Organization of Petroleum Exporting Countries, Indonesia's latest stand is in contrast to that of the group's leading producer, Saudi Arabia. A Saudi oil ministry official told Reuters on Monday that while it was worried by the steep oil price fall, any suggestion of an output cut was premature.

However, he reaffirmed that the kingdom remained strongly committed to a US$25 per barrel OPEC basket price.

OPEC ministers are due to meet on January 17 in Vienna.

Oil producers inside and outside the cartel have boosted production this year in an attempt to keep a lid on prices which major consumers feared were spiraling out of control and threatening the global economy.

Yusgiantoro also said that concerns over falling prices meant that Indonesia for the first time would hedge the price of its oil. (*)