OPEC's decision to trim oil production stumbles<\/p>\n
VIENNA (Agencies): An OPEC decision to trim oil output for the
\nfirst time in years stumbled yesterday when prices sank despite
\nunprecedented gifts of cuts from other exporters.<\/p>\n
But the producer club that pumps 40 percent of global output
\nput a brave face on the no confidence vote by predicting a rally
\nwhen evidence gradually emerges of supply restraint.<\/p>\n
OPEC oil ministers agreed yesterday to cut output by 1.245
\nmillion barrels a day over the next nine months in a bid to boost
\nprices, a statement released here said.<\/p>\n
\"Reflecting their serious desire to stabilize the market in
\nthe interests of all oil producers, OPEC member countries have
\nagreed to voluntarily cut\" production \"with effect from 1st April
\n1998 until the end of the year\", OPEC said in a statement after
\nmore than six hours of talks here.<\/p>\n
The cuts were unchanged from figures given over the past week
\nby individual members of the 11-member Organization of Petroleum
\nExporting Countries.<\/p>\n
Iraq is the sole member of OPEC exempt from the production
\ncuts \"in light of its exceptional circumstances\", the statement
\nsaid.<\/p>\n
The cuts will be on the basis of February output by members
\n\"as given by selected secondary sources\", rather than on their
\nofficial quota levels, the statement said.<\/p>\n
Several OPEC members have been producing well above their
\nofficial quotas despite the recent slide in oil prices to their
\nlowest levels in almost 10 years.<\/p>\n
In London, crude prices continued to fall early yesterday as
\ntraders reacted with \"disappointment\" to OPEC's meeting,<\/p>\n
Brent North Sea oil, for delivery in May, fell to $14.35 per
\nbarrel, from $14.79 late Monday.<\/p>\n
\"The market speaks with one voice and it is the voice of
\ndisappointment,\" said an oil expert at Salomon Smith Barney
\ntrading house, Peter Gignoux.<\/p>\n
Analysts gave a cool reception to the decision, arguing that
\nmore would need to be done to halt the slide in prices.<\/p>\n
\"The market should judge the OPEC decision in two months,\"
\nsaid Saudi Arabian Oil Minister Ali al-Naimi.<\/p>\n
He said OPEC could take further action to support the market
\nif necessary in what he called its new spirit of pragmatism.<\/p>\n
Skeptical traders agree it will take time to detect the tell-
\ntale changes in crude flows that will provide the vital evidence
\nneeded to underpin a sustained price rescue.<\/p>\n
But they were already selling the market when an emergency
\nOPEC meeting approved a 1.245 million barrels per day (bpd)
\ncartel contribution to a two percent cut in global output.<\/p>\n
The rest of the sacrifice will come from non-OPEC Norway,
\nMexico, Egypt, Oman and Yemen, which pledged cuts of 270,000 bpd
\nfor a total of 1.5 million bpd in overall reductions.<\/p>\n
\"The fall is hopefully a short-term blip. I think the market
\nis overplaying the pessimism,\" said a top executive at a Gulf
\nArab oil company, noting OPEC was making its first reduction in
\noutput since the mid-1980s.<\/p>\n
\"Remember, this is a unique agreement with non-OPEC producers.
\nWe were able to get an accord with Mexico and Norway when
\neveryone said we couldn't,\" said the executive.<\/p>\n
But traders are signaling they want deeper reductions amid
\nconcerns that glutted markets could remain awash with crude.<\/p>\n
Those worries helped lower benchmark Brent 53 cents to $14.24
\na barrel in London.<\/p>\n
The deal, spearheaded by Saudi Arabia, Venezuela and Mexico,
\nexcludes OPEC member Iraq, which is still under UN sanctions
\nimposed after its 1990 invasion of Kuwait.<\/p>\n
Traders say the new cuts could be threatened when an expected
\nrise in Iraq's UN-monitored Iraqi sales occurs later this year
\nunder an expanded program to obtain food and medicine.<\/p>\n
A price fall of 40 percent from October to mid-March shaved
\nbillions of dollars off OPEC revenues and helped swell global
\nstocks to a 20-year high.<\/p>\n
The slump has been caused by weak demand in cash-strapped
\nAsian countries, an earlier 10 percent rise in OPEC's output
\nlimits, a mild winter and increased Iraqi exports.<\/p>\n
An OPEC communique appealed to other non-OPEC oil exporters
\nwho have not yet offered reductions to support the market by
\nmoderating output.<\/p>\n
Iran leant weight to the accord after the meeting when oil
\nminister Bijan Zanganeh said his planned reductions would
\ndefinitely remove Iranian oil from the market.<\/p>\n
Production cut February output<\/p>\n
--------------------------------------------------------<\/p>\n
Algeria 50,000 868,000<\/p>\n
Indonesia 70,000 1,380,000<\/p>\n
Iran 140,000 3,623,000<\/p>\n
Kuwait 125,000 2,205,000<\/p>\n
Libya 80,000 1,453,000<\/p>\n
Nigeria 125,000 2,258,000<\/p>\n
Qatar 30,000 700,000<\/p>\n
Saudi Arabia 300,000 8,748,000<\/p>\n
United Arab Emirates 125,000 2,382,000<\/p>\n
Venezuela 200,000 3,370,000<\/p>\n
Total 1,245,000 26,987,000<\/p>\n
* The figures are in barrels per day<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/opecs-decision-to-trim-oil-production-stumbles-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }