OPEC says it's willing to cut oil production

OPEC, supplier of 40 percent of the world’s oil, will reduce oil production if necessary to support prices, Secretary General Abdalla el-Badri said.

“I am sure if at the May meeting there is a need to cut, they will take that decision,” el-Badri said Sunday. “In OPEC member countries, 35 projects have been delayed because of falling oil prices.”
Production cuts by the Organization of Petroleum Exporting Countries since September have failed to raise oil prices to the $70 a barrel sought by members as the global recession erodes demand. The average price in the first quarter was $43.32 a barrel, 56 percent lower than a year earlier.

The 12-nation group will meet May 28 in Vienna.

“Saudi Arabia and the Gulf states will be reluctant to accept a cut if prices stay at this level because they wouldn’t want to be perceived as hindering the recovery of the world economy,” said Ehsan Ul-Haq, head of economic research at JBC Energy in Vienna. “Most OPEC countries are satisfied with prices at around $50.”

The oil market is oversupplied because of production increases from non-OPEC countries even as OPEC members reduce output to stem a price slide, Algeria’s Oil Minister Chakib Khelil said. Oil traded in New York, which reached a record $147.27 a barrel in July, reached $32.70 a barrel on Jan. 20 and ended last week at $51.55.

“There is an oversupply of 720,000 barrels and it should be cleared,” Khelil told reporters in Algiers. “Non-OPEC countries did not help us to stabilize prices,” he said, adding that some countries had increased their production by 500,000 barrels a day.

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