OPEC to Cut Oil Supply by 1.5mln bpd

TEHRAN (FNA)- Members of the Organization of Petroleum Exporting Countries have decided to cut production by 1.5m barrels a day from November in a bid to stem a collapse in prices.

Saudi Arabian oil minister Ali al-Naimi described the move as “one quick decision”, as the cartel admitted a further cut in December was “possible”.

The price of crude has more than halved since it reached a record $147.2 a barrel in July. Some OPEC members fear that their economies will suffer through the drop in revenues.

This latest OPEC meeting, brought forward from next month because of the severity of the slide in prices, comes as Russia shows increasing interest in cooperating with the organization.

Russia, the world’s second largest oil producer after Saudi Arabia, has traditionally had representatives at OPEC meetings but has never publicly tracked the organizations cuts and increases in production quotas.

But on Wednesday Russia’s Deputy Prime Minister Igor Sechin said his country may build a margin of spare oil production capacity as a means of influencing prices. However, he said Russia would not join OPEC.

Nick Day, chief executive of the risk management consultancy Diligence, warned that any move by Russia to cooperate with OPEC is fraught with political dangers for the West.

“One of Russia’s objectives might be to counter America’s influence on Saudi Arabia’s control of OPEC.”

He believes that if Russia’s oil revenues are reduced, Moscow might try to recoup money by raising the price of gas it exports to Europe.

OPEC comprises 12 members: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The thirteenth, Indonesia, is due to leave the organization at the end of 2008.