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13 April 2024

Opec likely to cut output

By Agencies

Opec, the supplier of 40 per cent of the world's oil, will likely cut output to support prices when it meets this month, Algerian Oil Minister Chakib Khelil said.

Opec is seeking to check a 70 per cent slump in the cost of crude since last July's record high.

"Opec member countries will meet in March and an additional production cut is very likely," Khelil said.

Crude oil traded in New York has lost more than $100 since peaking at $147.27 a barrel on July 11 as the global economic crisis erodes demand for fuel.

The 12-nation Opec is scheduled to meet on March 15 in Vienna to review production quotas. The group has agreed on three output cuts since September.

Meanwhile, US Energy Secretary Steven Chu said he would be soon be making a call to ministers of the Opec ahead of their meeting this month.

Chu, speaking to Dow Jones Newswires on the sidelines of a 'green jobs' conference declined to say what he would tell the oil cartel ministers, but has previously said he would encourage Opec to 'stabilise' prices.

The decision to call ministers is an apparent evolution of policy for the secretary, as in previous weeks he indicated that relations with Opec was not a priority, even saying it was not in his domain.

April contracts on the New York Mercantile Exchange on Friday ended down one per cent at $44.76 a barrel, but trading up from previous weeks ahead of the March 15 Opec meeting where ministers will discuss cutting production to help prop up weak prices.