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Opec set to back production cut as oil close to $55 a barrel
Opec has agreed informally that it needs to cut production by at least 1m barrels a day – at least 4 per cent – in order to boost the falling price of oil.
"Mr. Chavez, you have a call on the white courtesy phone. White courtesy phone, Mr. Chavez."
The majority of the cartel’s members back a voluntary reduction over the coming weeks and the deal could be ratified as early as the group’s mid-December meeting in the Nigerian capital of Abuja. “Opec is going to defend a price floor for its oil of $50-$55 a barrel,” said one Opec official. The price of Opec’s crude oil yesterday fell to $55.27 while Brent oil futures traded in London slipped 33c to $58 a barrel, 26 per cent below their July peak.

Saudi Arabia, Opec’s most important member, is unhappy with the move towards voluntary cuts, but at the same time the kingdom has already quietly cut its production by 200,000 barrels a day over the past two months. It would rather reach a clear public position at the cartel’s meeting in Abuja. However, yesterday the kingdom sharply increased the price it charges European refineries for its oil, making it likely that there will be a further drop in volumes in November.
Posted by: Steve White 2006-10-05
http://www.rantburg.com/poparticle.php?ID=167732