Opec prepares to cut oil output

Gordon Brown, the British prime minister, recently said that any reduction made in a bid to push up oil prices would be “scandalous”, at a time when major economies are close to recession.

Steep decline
  
The price of New York oil dived on Thursday to a 16-month low, as the expectation of a recession increased concerns about falling demand, traders have said.
  

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Opec debates oil output

New York’s main contract, light sweet crude for December delivery, sank as low as $65.90 a barrel – a level last seen on June 13, 2007.
  
Crude futures in New York and London have plunged 56 per cent from record highs of above $147 a barrel reached only three months ago when supply concerns sent prices soaring.

Opec delegates will discuss the impact of the global financial crisis on the oil market on Friday, bringing forward talks that had been planned for November 18.

Opec produces 40 per cent of the world’s oil and its official output quota stands at  28.8 million barrels per day.
  
Ali al-Nuaimi, the Saudi oil minister, refused to comment on the likelihood of a scaling-back to output as he arrived in the Austrian capital on Thursday.
  
However, Shukri Ghanem, his Libyan counterpart, said that “a huge cut” of “two million barrels” was required to create a balance between supply and demand.
  
Rafael Ramirez, the Venezuelan energy minister, said there should be a cut of at least one million barrels. He also said that he believed there was a consensus among Opec’s 12 members.
  
But according to analysts, Opec’s Gulf state members led by Saudi Arabia, the world’s biggest oil exporter, are expected to oppose a reduction of more than one million barrels.
  
Opec comprises 12 members: Algeria, Angola, Ecuador, Iran, Iraq,  Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. 

Indonesia has suspended its membership and officially leaves at the end of 2008.

Iraq does not have an output quota due to the ongoing conflict in the country.