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OPEC to consider further cuts in production

india Updated: Oct 24, 2006 15:00 IST
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The member countries of Organization of the Petroleum Exporting Countries (OPEC) will discuss reducing oil production by another 500,000 barrels per day to prevent a further drop in prices when the group meets in Abuja, Nigeria in December, said Venezuela's Energy Minister Rafael Ramirez.

The ministers fear a supply glut could develop in the second quarter if peak winter demand fails to lower abundant reserves.

Last week at a special OPEC meeting in Doha it was decided to lower production by 1.2 million barrels a day in reaction to recent price drops which have gone below $ 60 a barrel. It was the first time the 11-nation organisation has cut production in two years.

The price for crude oil was $ 72 a barrel in August but had fallen as low as $ 55 and is now hovering at $ 58.

Oil inventories in consuming countries are well above seasonal norms, pressing down prices, according to Ramirez.

The group wants to restore market balance at an acceptable level to the producer and consumer, assured the energy minister in an interview with Union Radio on Monday.

He said the goal of $ 60 is still high by historical measures, but forecast that it will never again drop to the $ 30 mark due to "structural factors" such as production capacities at refineries.

OPEC meets on December 14 in Abuja.

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