OPEC decides 1.5 million barrels cut as from January
Regional, Economics, 12/29/2001

OPEC emergency summit, held in Cairo endorsed yesterday decision to decrease its total production from 23.2 million barrels per day (bpd) to 21.7 million pbd.

The Organization of Petroleum Exporting Countries (OPEC) has been in session in Cairo over three days under its chairman, the Algerian Oil Minister Chakib Khalil, and crowned it deliberations with the desired slash in oil production, to be effective as of January.

The non-Opec producers also agreed to cut down their oil output by 462, 500 bpd as of Tuesday.

Both OPEC and non-opec cuts will be valid for six months as from January 2002. An OPEC spokesman said the 10-state Cartel will monitor the market situation to take the proper decision in light of what has been agreed on Friday.

The non-Opec producers who will contribute a 462,500 bpd comprise Russia, Norway, oman and Angola.

It also called on all oil-producers to enhance their cooperation in order to maintain world market stability.

At a joint news conference with the Algerian Minister following the meeting, OPEC Secretary General Ali Rodriguez expected oil price would retain their current levels over the first quarter of next year in light of international economic improvement and US economic recovery.

"These positive developments will reflect in kind of oil prices," said Rodriguez, noting the OPEC's ultimate goal was to stabilize prices. The price per barrel in normal times should be ranging between 22 and 28 dollars, said Rodriguez.

Motivated by a feeling of responsibility, OPEC scrambled to salvage the market after a 3-dollar hike in oil prices sparked by the September 11 attacks on the U.S., said Rodriguez. Khalil estimated OPEC production at 35 percent to 40 percent of the world output.

On the cartel's role in supporting developing countries khalil said the OPEC fund had contributed around four billion dollars to financing projects in 107 developing nations referring to the fund's role in backing development projects in Egypt.

Slashing output and achieving market stability is the interest of both producer and consumer, he said, noting that the move would led to increased consumption in major industrial states in Europe and north America.

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