OPEC says it's ready for more oil production cuts
OPEC is ready to make further production cuts if prices don't rise in the coming weeks, its secretary-general said.business Updated: Jan 29, 2009 22:14 IST
OPEC is ready to make further production cuts if prices don't rise in the coming weeks, its secretary-general said on Thursday.
Abdalla Salem El-Badri, speaking at the World Economic Forum in Davos, expressed hope that global oil demand would pick up "by the end of this year or beginning of next year."
El-Badri insisted that OPEC members will have reached the group's pledge of a drop of 4.2 million barrels a day by the end of January.
After that threshold is reached, he said, "We have to review these numbers and see how the market will react."
"If we still have some downward problems, then OPEC will not hesitate to take some quantity out of the market," he said.
He stressed the reductions should not be so deep that oil producers can't keep up with demand once it rises again.
In December, the Organisation of Petroleum Exporting Countries announced a 2.2 million barrel production cut aimed at shoring up prices that have plummeted from mid-July highs of nearly USD 150 per barrel. The cuts came on top of another 2 million production cut instituted in the last quarter of 2008.
But economic troubles and shrinking demand have meant that the reductions have failed to provide lasting support to prices. Oil prices dipped below USD 42 a barrel on Thursday in Asia as rising US crude inventories offset expectations a massive US stimulus package will revive growth and consumer demand.
El-Badri said oil producers need "a reasonable price," preferably higher than USD 50, to afford investment in the industry.
First Published: Jan 29, 2009 22:12 IST