Oman agrees cut output to support OPEC

Oman agrees cut output to support OPEC

Agence France-Presse, Muscat

Oman, an independent oil producer, on Thursday announced it would cut production by 40,000 barrels per day (bpd) to back OPEC's bid to force up crude prices.

"Oman will at the start of January and until June reduce production by 40,000 bpd to support prices on the international oil market," Oil Minister Mohammad bin Hamad al-Romhi told the official ONA news agency.

The sultanate had at first said it would sacrifice just 25,000 bpd towards the 500,000 bpd target set for non-cartel producers by OPEC which wants to reduce its own output by 1.5 million bpd.

Ministers of the Organization of Petroleum Exporting Countries agreed in November to cut production by 1.5 million bpd from Jan.1, but only on condition that non-OPEC major producers like Russia, Norway and Mexico cut by half a million bpd.

After Norway made a firm pledge Monday to reduce output by 150,000 bpd if other producers also cut, OPEC had assurances of an overall reduction of 447,500 bpd from non-OPEC producers, including Russia (150,000 bpd), Mexico (100,000) and Angola (22,500 bpd).

The new figure for Oman, which is currently producing 900,000 bpd, would push that to 462,500 bpd, leaving a target shortfall of 37,500 bpd.

A barrel of Brent North Sea crude for February delivery was going for US$19.55 a barrel from 19.47 at the close on Wednesday. In New York overnight, the February light sweet crude contract rose 20 cents on Wednesday to $19.80 a barrel.

"Prices are remaining firm because it would appear that Oman is preparing to reduce its production by 40,000 barrels a day" instead of the 25,000 barrels expected by the market, said Prudential Bache dealer Luca Bertali.