Opec could tighten taps moregreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
22/01/2001 21:39 - (SA) Opec could tighten taps more
Buenos Aires, Argentina - Opec is ready to make more "drastic" production cuts to defend oil prices, but the group's secretary-general said in an interview published Monday he hopes prices stabilise within its target band.
The Organisation of the Petroleum Exporting Countries (Opec) agreed last week to cut oil output by 1.5 million barrels a day to keep the price of crude near $25 a barrel, aiming to counteract sliding oil prices and the upcoming spring downturn in demand.
Brushing aside US and European concerns that the cut could keep oil prices high and slow their economies, Opec said it would consider curtailing output by a further million barrels a day in March if prices fall below its preferred $22-$28 range in the coming weeks.
"If the price of oil remains under $22, we will reduce production by 500 000 barrels," Opec Secretary-General Ali Rodriguez told business daily Cronista.
When asked about the potential 1 million barrel cut, Rodriguez said: "Yes. I said that figure to indicate that, if it is necessary to apply more drastic measures, we will do it."
Rodriguez also defended the cut arguing prices would have plunged to $10-$15 a barrel if Opec had not decreased output.
"We don't want to repeat those experiences, because it is harder to correct the declines than the price hikes," he added.
-- Martin Thompson (firstname.lastname@example.org), January 22, 2001