OPEC to maintain current oil output

Chakib Khelil, OPEC's current rotating President, who is also the Algerian Minister of Energy and Mines, made the remarks after the consultative ministerial meeting on Saturday.

The ministers agreed to take any additional action to balance supply and demand and achieve market stability on 17 December, said Khelil.

Shoring up oil prices

The consultative meetings were held to discuss how to shore up oil prices amid a looming global recession.

Khelil said the OPEC ministers were concerned about the continued deterioration of the world economy and its impact on oil demand.

OPEC, which supplies about 40% of oil in the world, said oil demand would be affected significantly amid concerns of world economic recession in the first half of next year.

“In the first quarter of next year we are probably going to have a decline in demand," Khelil said, adding in the second quarter there would be a major decline.

The meeting was also held in preparation for the upcoming special ministerial-level meeting in the western Algerian town of Oran.

Cutting output

Oil prices witnessed sharp drops in recent months. On Friday, oil price stood at about $54 a barrel, declining by some 60% from more than $147 a barrel in mid-July.

The OPEC decided to cut oil output by 1.5 million barrels per day (bpd) in late October and is to discuss further oil output cut at the upcoming extraordinary ministerial meeting.

Earlier this month, Iran proposed another oil cut of 1-1.5 million bpd.

"It is better for a decision to be made for another cut of one million to 1.5 million barrels per day," Iran's OPEC representative Mohammad Ali Khatibi was quoted as saying.

Current prices too low to sustain investment

Before the meeting on Saturday, Saudi Oil Minister Ali Naimi said his country hoped to raise oil prices to $75 a barrel, but no measures would be taken until the OPEC meeting in Algeria.

Qatar Energy Minister Abdullah al-Attiyah also said the current crude prices were too low to sustain investments in the oil industry and it will be difficult to boost output capacity.

The OPEC meeting was held on the sidelines of a meeting of the Organisation of Arab Petroleum Exporting Countries (OAPEC), during which Arab oil ministers reached an agreement to launch a comprehensive study to evaluate the impact of the current global financial crisis on Arab petrochemical industries.

Inter-Arab co-operation

During the closed session, the Arab oil ministers discussed means of enhancing inter-Arab cooperation in face of the current fluctuation of the oil prices in the international market.

The OAPEC meeting also tackled the impact of the global financial crisis that may slow down the inflow of investments in the oil and gas industry, earlier reports said.

Article published courtesy of BuaNews-Xinhua