Khelil sees OPEC recommending 1.4-mln-bpd output cut on Jan. 17

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Khelil sees OPEC recommending 1.4-mln-bpd output cut on Jan. 17

Bridge News London--Dec. 13

OPEC oil ministers will make a recommendation at their next meeting on Jan. 17 in Vienna to cut their output by 1.4 million barrels a day, Algeria's Energy Minister Chakib Khelil told the Algerian newspaper Le Matin Wednesday. However, Khelil insisted that, if adopted, an output cut would only be implemented a month or more later. Khelil also said he expected world crude oil prices to stabilize at an average U.S. $22-23 per barrel in 2001.

Khelil said an output cut in early 2001 could be of around 1.4 million barrels per day since this amount corresponds to the level currently being overproduced by the market, according to Le Matin.

He insisted that recent falls in oil prices, from close to $35 to around $25 per barrel, had been forecast and could be explained by "OPEC's four successive output hikes in 2000, Iraq's decision to suspend its crude exports and the American and European threats to dig in their strategic reserves."

Khelil said again he expected oil prices to fall in the second quarter of 2001, adding that the extent of the fall would depend on how cold the winter is in the United States and in Europe. "We don't really know how sharp the fall will be," he said, adding: "a mild winter would take consumption needs down by up to 2 to 3 million barrels a day while a cold winter would lower these needs by only a million barrels a day."

He also said again that the outcome of the U.S. presidential elections and the Middle East peace process would also have an impact on world oil prices. OPEC last decided, on Oct. 31, to hike its output by 500,000 barrels per day as part of the implementation of the cartel's price band mechanism.

http://www.petroleumworld.com/story1736.htm

-- Martin Thompson (mthom1927@aol.com), December 13, 2000


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