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OPEC blames poor demand for the fall in prices

business Updated: Jan 13, 2009 20:05 IST
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Oil cartel OPECs' key producer Qatar on Tuesday blamed poor demand in the world due to economic slowdown in major economies, for the crash of crude oil prices to four-year low of USD 40 per barrel.

"There is no shortage of supplies in the market but there is no demand for oil because of world economic crisis," Qatari Oil Minister Abdullah bin Hamad al-Attiyah told reporters on his arrival in New Delhi to attend the Petrotech-2009 conference.

The slowdown in demand had forced OPEC, which supplies more than 40 per cent of the world's oil, to slash production by 9 per cent to revive prices. Qatar, he said, was producing 7,35,000 barrels per day and had a spare capacity of 9,00,000 bpd.

He said the Organisation of Petroleum Exporting Countries (OPEC) does not need to cut output again "so far" and no emergency meeting is planned before the cartel is to meet in Vienna on March 15.

February will be a "testing month" for OPEC's output reduction, agreed on last month, al-Attiyah said.

He said 2009 would be a "very difficult year." "What we are witnessing is the worst economic crisis of modern times," he said, hoping 2010 would see revival of economies and demand for oil picking up.

Separately, Saudi Oil Minister Ali al-Naimi, who also arrived in New Delhi this evening, said the world's largest oil exporter was producing less than its agreed quota of oil in February in an attempt to arrest the fall in oil prices.

"We are working hard to bring the market in balance. We will do what it takes to bring the market in balance," he said.

Saudi Arabia is presently producing eight million barrels of oil per day.