October 28, 2001	Sunday	Shaba'an 10, 1422

ABU DHABI, Oct 27: The world’s top oil producer Saudi Arabia and two other Gulf nations announced Saturday that Opec will shortly reduce production in order to push prices up.

Non-Opec Oman said there was a need to reduce “current (global) production” by at least one million barrels a day in order to boost the price of a barrel to $25 from current $19 to 20 level.

We (Opec) have already reduced our production three times. I cannot see what prevents us from doing it again in order to preserve the price band” of 22 to $28 per barrel, Saudi Oil Minister Ali Nuaimi said.

Opec will take all necessary measures to maintain the band, he added, at the end of a meeting with his counterparts Obeid Al-Nassiri from fellow Opec member UAE, and Mohammad bin Hamad al-Romhi of independent producer Oman.

Nuaimi said global oil supply was excessive and, asked if this meant the oil cartel was going to reduce production or, instead, decide to tighten members’ compliance with their quotas, he replied All of the above.

There is an agreement in principle to change the product ion ceiling, added United Arab Emirates Oil Minister Obeid al-Nasseri at a press conference.

Romhi said a one million bpd (cut) would be a good start, from current production.

The Middle East Economic Survey (MEES) reported Saturday that a proposal to cut output by 750,000 to one million bpd will be on the agenda of the Nov 14, ministerial meeting of Opec.

A joint statement issued after the Abu Dhabi meeting set the stage for broad agreement.

The ministers have agreed to intensify their contacts and to continue their consultations with all parties concerned to ensure their support and cooperation in order to take the proper measures to balance the global oil market and stabilize prices, including measures to reduce excess crude supply from world oil markets, it said.

The Sultanate of Oman has expressed its readiness to cut production and to cooperate with the rest of the producing countries from Opec and non-Opec in order to maintain the price band target, the statement said.

The ministers noted with great concern the continued deterioration in crude oil prices to levels unseen since two years, caused by the most recent downward revision in world demand for the current year as well as next year and the excess supply and growing commercial stocks as compared to last year.

Asked if he agreed that the excess volume was in the range of 700,000 to one million bpd, Nuaimi said the experts meeting on October 29 at the Opec headquarters in Vienna will hopefully distil that number and advise were it should be.

The conclusions of the experts’ meeting is supposed to weigh heavily on the decision to be taken by Opec at the crucial ministerial conference on November 14.

Nuaimi warned that unless action is taken, the oil producers would find themselves in a situation similar to 1997, when a barrel of crude touched seven dollars.

Hemi hoped that agreements could be reached with the independent producers, such as Russia and Mexico, before the 11-member organisation’s ministerial meeting.

However Opec has faced a dilemma in how to respond to the market slump.

The cartel has not triggered an automatic cut of 500,000 bpd foreseen by a price-band mechanism, even though its own basket price has remained under the price-band’s floor for four weeks.—AFP