OPEC eyes production cut as crude prices tumble
TEHRAN–Iran will propose OPEC cuts oil output by between 1.5 million and 2 million barrels per day (bpd) when the group meets in Algeria Wednesday, Iran’s oil minister was quoted as saying yesterday.
Ministers of the Organization of the Petroleum Exporting Countries are expected to announce an output cut at the Algeria talks to shore up prices that have plunged about $100 (U.S.) a barrel since a July peak. On Friday oil was trading around $46 a barrel.
"Iran’s proposal for this week’s OPEC meeting in Algeria will be a reduction of between 1.5 million and 2 million bpd," IRNA reported its oil minister, Gholamhossein Nozari, as saying.
OPEC deferred an output cut decision at a meeting in Cairo last month.
OPEC delegates said Saudi Arabia and its Gulf allies demanded tighter adherence to existing curbs, with some pointing at Iran easy payday loans.
OPEC’s recent output curbs amount to about 2 million bpd Iran, OPEC’s second-biggest producer, was to reduce its output by 199,000 bpd under the November move.
Nozari said OPEC needed to cut production by 1.5 million to 2 million bpd to prevent a drop in prices next year.
"The proposal for this level of output cut is in order to establish a balance in the market for oil supply and demand," he was quoted as saying. "Otherwise we will have oversupply in the first and second quarter of the coming year, which will go into stocks and will mean we are confronted with an additional oil price drop in the market next summer."