Friday, October 20, 2006

 

OPEC To Cut Output

Many OPEC countries routinely violate the output quotas, including Saudi Arabia. Also, this is a small cut, which can easily be replaced by non-OPEC countries.

Don't get alarmed.


From al-Rueters

DOHA (Reuters) - OPEC agreed on Friday to curb its output by 1.2 million barrels per day, its first cut for more than two years, to halt a precipitous fall in prices.

The reduction, amounting to 4.3 percent of OPEC's September production, was deeper than anticipated and the biggest since January 2002. It trims OPEC output to 26.3 million bpd from November 1.

"The credibility of OPEC is at stake," Algerian Energy and Mines Minister Chakib Khelil told Reuters before the meeting that began Thursday and ended in the early hours of Friday.

Some ministers said a further cut of 500,000 bpd could follow when OPEC next meets in Abuja in December, to address high fuel stocks in consumer countries, particularly the United States, and a projected drop in demand for OPEC oil in 2007.

U.S. oil rose 73 cents to $59.23 on the news. More...


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