RI expects OPEC to approve post-war oil output cut

RI expects OPEC to approve post-war oil output cut

Agence France-Presse, Jakarta

Indonesia expects OPEC members at their upcoming meeting to
approve an oil output cut of 1.5 million barrels per day for the
period after the Iraq war, Energy Minister Purnomo Yusgiantoro
said on Thursday.

Yusgiantoro told reporters the agenda of the April 24 meeting
in Vienna has not been fixed, pending reports from the
organization's secretary general.

"Although the agenda has not been decided, Indonesia supports
the idea of cutting production in order to reduce the current
oversupply," he told reporters.

He said Indonesia, the only Asian member of the Organization
of Petroleum Exporting Countries, wants to maintain prices in the
range of US$22 to $28 per barrel.

In Asian trading on Thursday, New York light sweet crude for
May delivery was $28.60 a barrel, down 25 cents from its close in
New York on Wednesday.

In London, reference Brent North Sea crude for May delivery
advanced 65 cents to $25.25.

OPEC's special meeting will consider a possible production
cut, according to a source at the cartel. The organization is
anxious to prevent a drop in world prices once the Iraq conflict
ends.

Meanwhile, oil prices traded lower in Asia on Thursday but the
market's attention shifted from the Iraq war to whether or not
OPEC cuts production, dealers said.

At 12:05 pm (0405 GMT), New York light sweet crude for May
delivery traded at $28.60 a barrel, down 25 cents from its close
of $28.85 in New York on Wednesday.

Of immediate concern is the prospect of a cut in oil
production by the 11 members of the Organization of Petroleum
Exporting Countries (OPEC) and part of the worry has already been
priced in, dealers said.

"There may be some concerns that OPEC may cut production to
bring prices up but I expect the market to have already factored
this possibility into prices," said a trader with a European
firm.

OPEC is to hold an extraordinary meeting in Vienna on April 24
to consider a possible production cut, according to a source at
the cartel.

Dealers in London said the market remained concerned at the
possible OPEC production cut, as well as how long it might take
for Iraqi oil to flow again.

"They have been pulling the statue down in Baghdad, but it is
more a sentimental and symbolic event and does not affect the oil
market," said Prudential Bache broker Tony Machacek in London.

"It seems that the whole situation in Iraq is beginning to
have less and less of a bearing on the overall situation of oil
prices," he said.

OPEC is anxious to prevent a drop in world oil prices once the
Iraq conflict ends.

Adding to the cartel's concerns about over-supply, Venezuelan
oil is back on line following a two-month labor strike which
ended in early February.

Additionally, oil majors in Nigeria have tentatively re-
started production in the Niger Delta region following weeks of
violent political and ethnic unrest, which halted around 40
percent of Nigeria's total oil production.