OPEC Cutting Crude Oil Production
Posted on: Thursday, 5 October 2006, 09:00 CDT
Members of the world oil cartel are cutting output and raising prices in a move that could be formalized when officials meet in Nigeria in December.
While the Organization of Petroleum Exporting Countries could call an emergency meeting sooner, members have launched an ad hoc production reduction of 1 million barrels per day, the Financial Times reported.
OPEC is going to defend a price floor for its oil of $50-$55 a barrel, said one cartel official.
The report of the informal OPEC production cut lifted the price of oil Thursday back up to more than $60 per barrel on European markets.
A formal agreement to reduce output could be ratified as early as the group's mid-December meeting in Nigeria's capital, Abuja.
Saudi Arabia, OPEC's biggest member, is unhappy with the move toward voluntary cuts but has quietly cut its production by 200,000 barrels a day over the past two months. Kuwait, a key Saudi ally in OPEC, on Wednesday became the first Persian Gulf state to follow Nigeria's and Venezuela's announcement late last week that they would unilaterally reduce production by a total of 170,000 barrels per day.
Source: United Press International
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