Business | Oil & Gas
Opec members 'must enforce cut'
Opec members have no choice but to implement agreed output cuts and inform customers of the reductions if they want a stable oil price between $70-$90 (Dh257-Dh331) a barrel, Opec President Chakib Khalil said on Sunday.
- Reuters
- Published: 23:26 November 2, 2008
Algiers: Opec members have no choice but to implement agreed output cuts and inform customers of the reductions if they want a stable oil price between $70-$90 (Dh257-Dh331) a barrel, Opec President Chakib Khalil said on Sunday.
Khalil, who is also Algeria's energy and mines minister, told Algerian state radio that Saudi Arabia was key to the success of the reductions, and if the world's biggest oil exporter took its time over the operation the oil price could be affected.
"I think that's what the market is waiting for now - to see that there really is a reduction in the market and not take at face value the declarations of the different deciders about a cut, or another cut, or about their intentions. It's what is seen on the market that will affect prices," he said.
Asked what effect British Prime Minister Gordon Brown's visit to Saudi Arabia yesterday could have on Opec's plan to stabilise prices, Khalil replied: "Everything depends on the impact of the decision of Saudi Arabia ... Therefore, if it slows the cut, or does not do it, then of course there will be an impact on the oil price."
Informing clients
The Organisation of Petroleum Exporting Countries decided at a meeting in Vienna on October 24 to chop production by 1.5 million barrels per day or about 5 per cent from November 1 to halt a more than 50 per cent slide in prices.
Traders are now looking for evidence that they are making good on that promise. A key signal would be Gulf suppliers sending word to Asian refiners that volumes will be reduced.
Khalil said: "Until now, Saudi Arabia has not yet informed its clients of the cut of 5 per cent that we have agreed, while all the other members have done this."
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