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.