More Opec cuts to reverse price plunge

Opec members will further cut oil production when they convene next month to try to push up prices to at least US$70 ($131.60) a barrel, Iraq’s Oil Minister, Hussain al-Shahristani, said at the weekend.

A series of cuts by the Organisation of Petroleum Exporting Countries has so far failed to stop the dramatic fall in oil prices which last July went as high as US$147 a barrel.


When trading closed last week the price was just $40.17 a barrel.

The drop has hit Iraq particularly hard as it depends on oil revenues for nearly 95 per cent of its budget. As a result, the Government was forced to slash its 2009 draft budget from US$80 billion to US$64 billion.

“The year 2009 will be a tough year around the world and that will be reflected in the oil demand and then prices will drop,” al-Shahristani told a symposium in Baghdad.

“In March, Opec will convene and there will be an intention for more production cuts to shore up prices and encourage production from non-Opec members,” he added.

“We do believe that the price should be no less than US$70 for a barrel.”

AP