OPEC may cut output again if required: Purnomo

The Jakarta Post, Jakarta

The Organization of Petroleum Exporting Countries (OPEC) may cut output limits again in May if supply curbs in April were not enough to keep oil prices between US$22 and $28 a barrel.

"By the end of March we will meet again and if (the April cut) is not enough, we can consider (another cut) in May," OPEC president Purnomo Yusgiantoro, who is also Indonesia's minister of energy and mineral resources, said on Monday.

Indonesia is the only OPEC member in the region.

However, Purnomo added that OPEC would not cut output again in May if the oil price "remains good".

OPEC is scheduled to meet on March 31 in Vienna to discuss its production policy.

Purnomo said any further production cuts from 23.5 million barrels per day (bpd) would depend on price. The group has a target of keeping the price of a reference basket of seven crudes in the $22 to $28 range.

By Friday the price of benchmark Brent North Sea crude oil for April delivery stood at $30.42 a barrel in London, compared to $28.60 the week before.

In New York, the reference light sweet crude March contract traded at $34.35 against $33 a week earlier.

OPEC ministers decided last week to reduce official output limits by one million barrels per day, excluding Iraq, from April 1 to avoid any price collapse in the second quarter when demand for oil drops as winter comes to an end in the northern hemisphere.

OPEC, which supplies a third of the world's crude oil, is worried by forecasts of big falls in demand. The International Energy Agency has predicted that oil demand in the second quarter of this year might slump by as much as four million bpd, more than double the normal seasonal downturn.

The organization was also ordering the 10 countries within its production quota system to eliminate 1.5 million barrels a day of surplus production now exceeding the official quota of 24.5 million barrels a day.

OPEC already caught markets by surprise in late September when it trimmed overall output by 900,000 barrels per day to 24.5 million barrels, sending prices soaring.