OPEC to cut output to avoid price collapse<\/p>\n
Agence France-Presse, Doha<\/p>\n
OPEC can be expected to agree to slash production at a
\nministerial meeting in Qatar on June 11 to avoid a price
\ncollapse, OPEC President Abdullah bin Hamad al-Attiyah told AFP
\non Monday, strongly defending Iraq's position within the oil
\ncartel.<\/p>\n
\"The cut will be the topic that will be very carefully
\ndiscussed,\" Attiyah said, noting that confusion about Iraq's
\nreturn to the market and inventories made it difficult to set a
\nfigure.<\/p>\n
\"I believe maybe we will cut it because we believe that in all
\nearnestness there will be more oil in the market and the market
\ncannot accept it.<\/p>\n
\"We don't want to see this huge floating of oil, collecting
\ndramatically and putting pressure on the oil price. We don't want
\nto see ourselves in the position of 1999,\" when prices collapsed
\nto $10 a barrel on oversupply.\"<\/p>\n
Iraq's return to the market after the U.S.-led war is
\npredicted to come around the end of June, but Attiyah said it was
\ndifficult to read.<\/p>\n
The Organization of Petroleum Exporting Countries would \"also
\ntreat very carefully the re-entry of Iraq to the market,\" at the
\nJune talks in Doha.<\/p>\n
\"It's really very difficult,\" he stressed, recalling
\nconflicting reports of the exact timing and how quickly Iraq
\nwould reach pre-war daily average production of 2.7 million
\nbarrels per day (bpd).<\/p>\n
\"This also we have to study very carefully,\" he said. \"The
\nanalysis is very confused now about when Iraq is coming.\"<\/p>\n
He took strong issue with U.S. suggestions that Baghdad may
\npull out of OPEC.<\/p>\n
\"I heard a lot of rumors saying maybe Iraq will withdraw,\"
\nAttiyah said in his office at Qatar's energy ministry. \"Is it
\ntrue? I don't believe it. Is the interest of Iraq tomorrow to see
\nthe oil price at six dollars? I don't believe it. I don't think
\nthis a pragmatic answer.\"<\/p>\n
Washington's chief executive officer of Iraq's oil advisory
\nboard, Philip Carroll, told the Washington Post on May 17 Iraq
\nmay be best served by ignoring OPEC quotas and producing as much
\noil as it can.<\/p>\n
Attiyah has already said that for oil-related matters OPEC
\nwould not recognize the U.S. as a representative of Iraq, which
\nboasts the world's second largest oil reserves, and would await a
\nnew government in Baghdad.<\/p>\n
Iraq for the past decade has remained an official OPEC member
\nbut has exported its oil under United Nations (UN) auspices as
\npart the sanctions regime imposed following its 1990 invasion of
\nKuwait.<\/p>\n
Sanctions were lifted last week, paving the way for exports
\nunder the post-war U.S. administration in Iraq.<\/p>\n
Iraq's last OPEC quota in July 1990 was 3.14 million bpd, the
\nsame as Iran and about 14 percent of OPEC's production ceiling.
\nBefore the war Iraq's antiquated oil industry could manage to
\npump an average of 2.7 million bpd.<\/p>\n
Crude slumped after OPEC's unexpected move to raise output
\nceilings from June 1 while also trying to crack down on quotas
\nbusting.<\/p>\n
However, prices have since risen despite the removal of UN
\nsanctions.<\/p>\n
In London, benchmark Brent North Sea crude oil for July
\ndelivery rose to $26.34 per barrel in late Friday trading from
\n$26.15 a week earlier.<\/p>\n
In New York, light sweet crude June-dated futures reached
\n$29.30 from $28.75 the previous week, but closed at $29.16 for
\nJuly delivery.<\/p>\n
Dealers took fright after low weekly U.S. oil inventory
\nfigures were released on Wednesday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/opec-to-cut-output-to-avoid-price-collapse-1447893297",
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"sponsor": "Okusi Associates",
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