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OPEC Says Will Cut 1.5M bpd as of Jan. 1 By Manuela Badawy and Tom Ashby Reuters CAIRO, Egypt -- OPEC oil producers are set to seal an unprecedented alliance on output restrictions with rival independent suppliers to prop up crude prices, cartel ministers said Thursday. Saudi Oil Minister Ali al-Naimi said OPEC ministers had a consensus to reduce supply by 1.5 million barrels per day from Jan. 1 at their meeting Friday. "We have a consensus for 1.5 from Jan. 1," he told reporters in Cairo. The Organization of Petroleum Exporting Countries said in November that it was prepared to implement the restrictions to counter an economic downturn that is sapping world petroleum demand -- but only if non-OPEC producers made reductions of 500,000 barrels daily. Big independent producers like Russia and Norway stood accused by the cartel of taking a free ride on three rounds of supply cuts made already this year by OPEC. OPEC, in control of nearly two-thirds of world exports, had sliced 3.5 million barrels a day since January and was worried it was losing market share. Naimi said there was no doubt now that the five non-OPEC nations, which also include Mexico, Oman and Angola, would deliver on promises made in recent weeks to remove a combined 462,500 bpd. The cuts are likely to be imposed for six months, although OPEC will review policy at a mid-March meeting. Naimi said OPEC was aiming to push prices back up to between $20 and $25 for a barrel of its crude -- equivalent to about $22 to $27 for international benchmark Brent blend. Brent in early London trade on Friday rose $1.21 a barrel to $20.55. Russian benchmark Urals was up $1.17 a barrel to $19.43. OPEC's success in getting non-OPEC to help shoulder the burden of its supply management campaign puts to rest the threat of an all-out price war that in mid-November pushed Brent below $17 a barrel. Oil had fallen from $28 for Brent since the Sept. 11 attacks darkened an already gloomy economic outlook, hitting petroleum demand. Now it looks likely that importing nations, struggling to combat recession, will see energy bills rising again. "These are the largest ever non-OPEC contributions to OPEC's efforts to maintain the price of oil," said consultant Gary Ross of New York's PIRA Energy. "Producers that control 80 percent of the world's crude exports are now working together for higher prices." "This will dramatically tighten crude markets and cause prices to continue to move higher," he said. The new curbs will cut production by the cartel at its lowest for 10 years. Key to OPEC's success in lifting prices will be compliance with the restrictions. The latest data for November puts adherence with this year's earlier cuts at more than 80 percent. The 10 members with quotas -- Iraq excluded -- pumped 23.8 million bpd, or 600,000 bpd in excess of official limits. Naimi said crude sales from Saudi Arabia, easily OPEC's biggest supplier, would be lowered in line with its new quota immediately. Worries are that Russian oil companies may find ways to bypass the lower crude export quotas imposed by Moscow for the first quarter. ==^================================================================ This email was sent to: [email protected] EASY UNSUBSCRIBE click here: http://topica.com/u/?a84x2u.a9WB2D Or send an email to: [EMAIL PROTECTED] T O P I C A -- Register now to manage your mail! http://www.topica.com/partner/tag02/register ==^================================================================
