November 9, 2001	Friday	Shaba’an 22, 1422

MARRAKESH, Nov 8: Saudi Arabia on Thursday raised the bar for Opec’s next round of production cuts, saying the group would need to reduce supplies by more than a million barrels a day to prop up sagging oil prices.

One million barrels per day is not enough. The number one (million) is a joke, Saudi oil minister Ali Naimi told reporters in Marrakesh.

Asked whether Opec might slice as much as 1.5 million bpd Naimi said: A cut of 1.5 million barrels per day is an easy option. If we cut by 1.5 million bpd, it would be nice to see non-Opec contribute with a cut of 500,000 bpd.

He was speaking on the sidelines of climate change talks in Morocco.

Opec oil ministers who meet next week in Vienna have come under pressure to consider reducing supply by more than a heavily trailed million barrels a day because that plan has failed to stabilise crumbling oil prices.

Brent crude in early London trade showed a modest reaction to Naimi’s remarks, gaining 42 cents to $19.75 a barrel. It touched a two-year low of $18.81 earlier this week.

Crude has fallen $8 a barrel since the September 11, attacks darkened an already gloomy economic outlook and dented petroleum demand.

Naimi said he was still confident that Opec could return prices to the cartel’s target basket range of $22 to $28 a barrel despite the global economic downturn.

That indicates that Naimi, Opec’s most influential minister, still sees more benefit to Opec revenues from keeping prices high with volume cuts than defending market share against non-Opec at the risk of a price collapse.

Opec has lobbied major non-Opec producers Mexico, Norway and Russia to contribute to its supply management efforts by curbing their own output.

But all three countries have rebuffed the requests and all are expected to raise production in the coming year.

Naimi acknowledged Opec’s difficulties in trying to persuade non-Opec to change tack, saying only minor producer Oman had promised help.

Mexico, Russia and Norway have not said they would cut production, he said.

Opec already has slashed output by 3.5 million bpd this year and a cut of 1.5 million bpd would reduce official limits for 10 member countries to 21.7 million bpd, down 19 per cent this year.

LONDON: Oil prices bounced back above $20 a barrel here for the first time in a week on Thursday amid market speculation that Opec would agree deeper-than-expected cuts in output next week.

A barrel of Brent North Sea crude for December delivery spiked 72 cents in early deals to $20.05, pulling well clear of two-year low points below 19 dollars plumbed earlier this week.

New York light sweet crude for December ticked up four cents overnight to $19.96 a barrel.

The Opec President (Chakib) Khelil also came out and said he was hoping for a cut of between one and 1.5 million, he added.

Opec’s own basket price rose 11 cents on Wednesday to $17.67 a barrel, according to the Vienna-based OPECNA news agency.—Reuters/AFP