Oran Dec 17: OPEC oil ministers are gathering in the Algerian city of Oran for an extraordinary ministerial conference which will take place on Wednesday, Dec 17. The organisation could make their deepest oil supply cut ever to combat shrinking demand, bulging stocks and a $100 collapse in oil prices.
For many in the Organisation of the Petroleum Exporting Countries, up to two million barrels per day (bpd) must be removed to keep up with a slump in consumption that has knocked two-thirds off prices since July.
OPEC is also hoping for support from exporters outside the group. Russia, the biggest non-OPEC exporter, is sending its Energy Minister and its Deputy Prime Minister to the Oran meeting. When asked about possible Russian involvement in any OPEC output decision, OPEC president, Algeria's oil minister Chakib Khelil said, "They have already expressed their support -- we are now hoping for concrete support, on the ground action," he said.
In the past, any collaboration from non-OPEC countries has been unconvincing. However, the depth of the price fall has shaken all producers.
Asked whether Russia could join the group, he said, "We have always hoped they will join OPEC. Russia would give particular weight to OPEC."
"With Russia on board, OPEC would account for around 50 percent of world oil supply rather than around 40 percent at present," he added. Khelil said it would take more than half a year to remove oversupply if OPEC were to cut by two million barrels per day.
Oil use has fallen in the world's top three oil consuming countries -- the United States, China and Japan. About 86 million barrels of oil are burned worldwide each day. In 2001 OPEC cut by five million bpd in four stages, 19 percent of its supply, laying the foundation for a six-year boom in oil prices that culminated this summer in a record $147.27 a barrel.
OneIndia News (With inputs from Agencies)