TEHRAN (FNA)- The Organization of Petroleum Exporting Countries will on Friday announce it is cutting oil output to help lift crude prices that have dived 55 per cent since striking record highs in July, as a global economic slowdown slashes demand, analysts said.
OPEC, whose 12-member countries together pump about 40pc of the world’s oil, said that its special ministerial meeting in Vienna would be brought forward to October 24 from mid-November.
On Thursday the price of Brent North Sea crude dived to a 17-month low point of $65.45 a barrel, which compared with a record high of $147.50 just three months ago when supply worries had sent prices rocketing.
“The collapse in oil prices in recent days has likely sent OPEC into a panic,” said Capital Economics analyst Hugo Navarro.
“The oil-producing cartel has advanced the timing of its extraordinary meeting from November 18 to Friday, where we think it will announce a cut in production as large as 1.5 million barrels per day.
“But any bump in prices is likely to be short-lived,” added Navarro, citing the fact that he along with many other economists expect a global recession next year.
OPEC has not officially indicated whether production levels would be altered at its meeting.
But Algerian Energy Minister and current OPEC chief Chakib Khelil said OPEC should order a “substantial” cut in oil output.
“There will be a reduction in production at the next extraordinary meeting of OPEC, and it will have to be a substantial one to get the balance right between supply and demand,” he said.
“If it has to be 1.5mln barrels per day, or 2mln barrels per day, that’s what it will be,” Khelil added.
Khelil said that OPEC wanted to see oil prices “remain stable” throughout the first half next year.
Many analysts are forecasting OPEC to slash output by at least 1mln barrels per day, although Olivier Jakob of oil market analysis group Petromatrix said a cut may be limited to 500,000 bpd.
OPEC will try to stabilize global crude oil prices at around $70 to $90 a barrel, analysts said.
Joining the group calling for a cut in production and a need to stabilize prices, was Qatar’s Oil Minister Abdullah Al Attiyah.
Al Attiyah said that oil prices at between $80 and $90 barrel would “be acceptable to consumers and producers at this time.
Iran wants OPEC to cut output by 1mln to 3mln bpd because of the financial crisis and a drop in world oil demand, Iran’s OPEC Governor Mohammad Ali Khatibi said yesterday.
Pointing at various world financial crises and a drastic drop in world oil demand, he expressed hope that OPEC member states would reduce their output by 1 to 3mln bpd to establish balance between supply and demand.
Khatibi also later told Iran’s press tv that some OPEC ministers had said demand had decreased by 3mln bpd and others had called for a cut of at least 1m bpd, so “maybe between 1 and 3mln barrels per day there will be … discussion.”
Iranian Oil Minister Gholam Hossein Nozari has also renewed his call for OPEC to cut production, saying this was the only way to stop crude prices falling further.