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OPEC Cutting Above-Target Output

OPEC Cutting Above-Target OutputOPEC Cutting Above-Target Output

OPEC will agree as a minimum step to remove crude from the market that it is pumping above the agreed target, a Libyan oil official said, to support prices that hit a four-year low.

"I believe that the ministers will arrive to an agreement, as a minimum, to ask all members to abide by the 30 million ceiling for December," Samir Kamal, Libya's OPEC governor and head of planning at the Libyan oil ministry, told Reuters.

Complying with the target would in theory cut OPEC output by 600,000 barrels per day (bpd) based on the International Energy Agency's estimate that OPEC pumped 30.60 million bpd in October. OPEC's own figures put production lower at 30.25 million bpd. Oil fell to a four-year low below $77 a barrel last week on ample global supply, slowing demand and scepticism that the 12-member Organization of the Petroleum Exporting Countries will be able to bolster prices. The Libyan official added he also expected OPEC ministers to "keep a watch on the market response and if needed, to set a new ceiling of not more than 29.5 million bpd".

Kamal said he was not speaking on behalf of the Libyan government. Libya is struggling with two administrations -- the internationally recognised government, located in Tobruk since August, and a Tripoli-based rival administration. Neither has commented on the OPEC meeting. Last month, Kamal called for an OPEC cut of at least 500,000 bpd and said Libya should be exempt from the measure since it is working to sustain a rise in production hit by months of fighting and protests.

 

Financialtribune.com