OPEC Looks to Cut Production

OPEC is close to making a decision to cut output by about one-million barrels a day to keep prices near $25 a barrel as demand slows, oil ministers said. Venezuelan oil minister Alvaro Silva said a consensus was forming on a reduction of about that size, equal to 3.6% of the group's production, and that OPEC was considering amounts between 750,000 and one million barrels a day. Iranian oil minister

Tim Parry

March 15, 2001

2 min read

OPEC is close to making a decision to cut output by about one-million barrels a day to keep prices near $25 a barrel as demand slows, oil ministers said.

Venezuelan oil minister Alvaro Silva said a consensus was forming on a reduction of about that size, equal to 3.6% of the group's production, and that OPEC was considering amounts between 750,000 and one million barrels a day. Iranian oil minister Bijan Namdar Zanganeh also said the cut would be about one million barrels.

The International Energy Agency yesterday trimmed its forecast for demand growth this year for a fourth straight month, predicting a gain of 1.4 million barrels a day, 460,000 fewer than in December.

Ali Rodriguez, OPEC's secretary general, told reporters he expects world oil use would increase by 1.3 million barrels daily, of which nations outside OPEC would supply one million barrels a day. Ali al-Naimi, the oil minister for Saudi Arabia, forecast a gain of 1.1 million to 1.2 million barrels in daily demand.

OPEC last month lowered production and is preparing another move to counter a seasonal drop in demand before the summer travel season begins in the U.S., a nation that consumes a quarter of the world's oil.

OPEC’s production accounts for 40% of the world's oil.