OPEC to cut oil output by one million bpd

OPEC to cut oil output by one million bpd

OPEC will go ahead with a planned oil output cut of one million barrels per day (bpd) from April 1, ministers told reporters on Wednesday after talks at their Vienna headquarters.

The 10 nations in OPEC's quota system will implement a decision agreed on February 10 in Algiers to reduce their official crude oil production from 24.5 million bpd to 23.5 million from April 1, said the energy ministers of Algeria, Qatar and Kuwait separately.

The decision was due to be announced formally at a press conference later Wednesday.

The Organization of Petroleum Exporting Countries had faced calls from the United States and other importers to postpone the move to help rein in oil prices which have hit 13-year highs in New York recently. Gasoline prices meanwhile are at record peaks in the United States.

But Kuwait withdrew a proposal to delay the cut because such a move required unanimous support within OPEC, something it failed to receive, said Kuwait's Energy Minister Sheikh Ahmed Fahd al- Sabah.

"To change the resolution from Algiers you have to be unanimous and I don't think there was unanimous support for my proposal," he said.

However, the minister acknowledged that members might not implement the reduction in full, saying: "I think there will be some overproduction by all members."

He said he thought OPEC's actual production would be from 25- 26 million bpd, a level analysts here said would be right for current market conditions.

Fahd Al-Sabah said: "From the technical side the cut is not too much because there is... no shortage in the market.

Asked if OPEC would anger the United States with its decision to cut production when prices were so high, Fahd Al-Sabah said: "From the technical side, I don't think OPEC is doing the wrong thing.

"OPEC is still not a political organization (and) has to work with the procedures of the market," he said. -- AFP