Sunday, 31 December, 2000, 12:03 GMT Gulf calls for oil output cuts

The Gulf states have called for a global cut in oil production to counter falling prices, prompting fears of a renewed fuel price hike. At the end of their summit in Bahrain, the leaders of Saudi Arabia and its partners in the six-member Gulf Cooperation Council called on OPEC to agree to the cuts at its next meeting in mid-January

The Gulf states want to see world oil prices stabilise at $25 a barrel. They are currently hovering in the lower range of OPEC's $22-28 a barrel price band.

Saudi Arabia is pushing for a cut in production by between 1.5m and 2m barrels per day.

Falling prices

The average price of crude oil has fallen by about 30% since October when the major producers stepped up production under pressure from industrial countries.

At the time, the industrialised countries were facing economic disruption because of high prices.

The price of crude fell further on the last trading session of the year in London on Friday. Prices dipped to eight-month lows as dealers remained confident that adequate supplies would continue to flood the market.

A week ago, OPEC President Ali Rodriguez of Venezuela said that if the basket crude price remained under 22 dollars a barrel "production will be reduced by 500,000 barrels a day."

The six Gulf monarchies - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates - account for 45% of the world's oil reserves and provide around 20% of the world's crude.

http://news.bbc.co.uk/hi/english/business/newsid_1094000/1094901.stm

-- Martin Thompson (mthom1927@aol.com), December 31, 2000

Answers

Sunday, 31 December, 2000, 12:26 GMT Saudi Arabia fuels oil crisis fears

The prospect of a global cut in oil production, leading to a renewed fuel price hike, has strengthened with Saudi Arabia backing calls for a reduction in output.

The world's biggest oil producer is also urging support from other Gulf states if world prices do not return to the twenty-five dollars a barrel region soon.

The average price of crude oil has fallen by about thirty percent since October when the major producers -- members of of the Organisation of Oil Exporting Countries, OPEC -- stepped up production under pressure from industrial countries which faced economic disruption because of high prices. Saudi Arabia is now calling for an OPEC-wide cut of up to two-million barrels a day. OPEC is due to reconsider its policy on January 17, but has already agreed an automatic cut of half-a-million barrels a day if benchmark crude prices stay consistently below twenty-two dollars a barrel.

http://news.bbc.co.uk/hi/english/world/middle_east/newsid_1091000/1091 870.stm

-- Martin Thompson (mthom1927@aol.com), December 31, 2000.