Oil dips under $18 as OPEC throws down gauntlet<\/p>\n
Reuters
\nLondon<\/p>\n
Oil prices were hovering around two-year lows on Thursday
\nafter OPEC raised the stakes in a game of high risk poker with
\nrival oil producers.<\/p>\n
In the opening salvo of what industry analysts said could turn
\ninto an ugly oil price war OPEC ministers agreed to cut out put
\nby 1.5 million barrels per day.<\/p>\n
But they said they would defer implementing the lower limits
\nuntil Jan. 1 \"subject to a firm commitment from non-OPEC oil
\nproducers to cut their production by a volume of 500,000 bpd
\nsimultaneously\".<\/p>\n
\"We are trying to give them a generous offer and if I were in
\ntheir shoes I would take this offer,\" said Qatari Oil Minister
\nAbdullah al-Attiyah.<\/p>\n
Brent crude futures were down 25 cents at US$18.50 a barrel at
\n1043 GMT having dipped below $18 a few minutes after trading
\nbegan.<\/p>\n
\"This is an offer or perhaps even a threat. It doesn't really
\nfeel like an OPEC agreement because it depends on countries
\noutside of the cartel,\" said Glen Murray of oil brokers Azure in
\nFrance.<\/p>\n
\"It seems to be a matter of who blinks first\".<\/p>\n
\"This appears to be a big bet that non-OPEC will come to the
\nparty and cut production rather than face their revenues being
\ncrushed by falling prices,\" said Simon Games-Thomas at NM
\nRothschild & Sons in Sydney.<\/p>\n
OPEC wants to curb world supplies to lift prices back into a
\n$22 to $28 a barrel band, but has become increasingly frustrated
\nwith the lack of backing from non-cartel producers after it made
\nthree output cuts this year totaling 3.5 million bpd.<\/p>\n
It says non-members, which have been increasing output, should
\nshoulder some of the burden of propping up prices by managing
\nsupply to demand, a strategy that has served the cartel well in
\nthe last two years.<\/p>\n
Saudi Arabian Oil Minister Ali al-Naimi said on Thursday that
\nOPEC will never cut production unless Russia contributes
\nsignificant supply curbs to support the cartel's efforts to
\nstabilize the oil markets.<\/p>\n
Asked whether OPEC's would still cut even without a deeper cut
\ncommitment from Russia, Naimi replied: \"Absolutely not, so we all
\nlose.\"<\/p>\n
\"Russia's cut is minuscule and disappointing and we don't take
\nit seriously,\" Naimi told a news briefing.<\/p>\n
\"We've made a very, very reasonable request, Russia's position
\nis extremely unreasonable. We're in a crisis mode -- the biggest
\nlosers will be Russia and Saudi Arabia,\" the minister said.<\/p>\n
But he stressed \"this is not a price war and its not a grab
\nfor market share\".<\/p>\n
Russian Finance Minister Alexei Kudrin said on Thursday he
\nhoped his country, under intense pressure from OPEC to cut
\nexports and output to support crude prices, would be able to work
\nout a deal with the oil cartel.<\/p>\n
Russian Deputy Prime Minister Viktor Khristenko, who
\ncoordinates the government's work with the country's mostly
\nprivately-owned oil companies, saw a chance for talks with OPEC.<\/p>\n
\"We have not excluded and have never broken off the system of
\nconsultations with OPEC member states about a stable oil market,\"
\nKhristenko told reporters in Azeri capital Baku.<\/p>",
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