Oil prices will recover to $22 if OPEC cuts output: Purnomo<\/p>\n
Moch. N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
\nexpressed optimism on Wednesday that oil prices would recover to
\naround US$22 per barrel if the Organization of Petroleum
\nExporting Countries (OPEC) cuts oil output by 1 million barrels
\nper day (bpd).<\/p>\n
"We hope OPEC will cut production by that amount. With the
\ncut, I'm optimistic that prices will reach $22 again," he said
\nafter opening a two-day international mining and electricity
\nexhibition and conference.<\/p>\n
Purnomo added that the oil consortium must also lobby non-OPEC
\noil producers to lower production, otherwise OPEC's move would
\nprove futile.<\/p>\n
International crude prices have continued to weaken due to the
\nworld economic slowdown, worsened by the Sept. 11 terrorist
\nattacks on Washington and New York.<\/p>\n
The prices have been hovering below $20 per barrel over the
\npast few days and there have been rising fears that the price
\ncould fall to below $10 per barrel.<\/p>\n
The 11 OPEC member countries will convene in Vienna on Nov. 14
\nto appraise market conditions and set the production target.<\/p>\n
OPEC, which produces about 40 percent of the world's oil, has
\nalready cut its output quota three times this year.<\/p>\n
Under OPEC's price accord, if the price of its range of seven
\ncrude oils rise above $28 a barrel for 20 consecutive days, the
\norganization will increase production by 500,000 bpd. Conversely,
\nif the price drops below $22 output will be cut by 500,000 bpd.<\/p>\n
OPEC secretary-general Ali Rodriguez said this week that cuts
\nof more than 1 million bpd were a "possibility". Rodriguez did
\nnot specify the exact size of a possible reduction.<\/p>\n
Purnomo said that if oil prices reach $22 per barrel, it would
\nhelp the government secure its revenue target from oil and gas in
\nthe 2001 state budget.<\/p>\n
Indonesia, the only OPEC member in the region, relies heavily
\non oil revenue to finance its state budget.<\/p>\n
The minister has repeatedly said that the government would be
\nable to meet its oil and gas revenue target this year as it had
\nenjoyed profits when oil prices were considerably higher than the
\nbudget assumption of $24 per barrel in the first half of the
\nyear.<\/p>\n
This, he said, would offset the fall in prices after the Sept.
\n11 attacks.<\/p>\n
Purnomo said he was optimistic that next year's oil prices
\nwould hover around $22 despite a gloomy outlook for the global
\neconomy.<\/p>\n
The 2002 state budget assumes an average oil price of $22 per
\nbarrel.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/oil-prices-will-recover-to-22-if-opec-cuts-output-purnomo-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}