OPEC needs to cut output by up to 1 million bpd: delegate


OPEC needs to cut its oil output by up to 1 million barrels per day (bpd) at its meeting next week, a delegate from one of OPEC’s smaller producers said, as oil prices that have slid to a four-year low squeeze producers’ budgets.

The comments are a further sign that support for action is broadening in the Organization of the Petroleum Exporting Countries, although the most influential member Saudi Arabia has yet to say if it supports a cut.

OPEC’s current oil output will lead to a supply surplus in 2015, when global demand for OPEC crude will slip to between 29.20 million barrels per day (bpd) and 29.5 million bpd, the delegate said, citing OPEC’s own figures.

“We are producing about 1 million barrels above that, which is quite a lot,” the delegate, who declined to be named, said. “Probably a cut of 1 million barrels would be enough.”

OPEC’s 12 members produced 30.25 million bpd in October, according to the group’s own figures, although the International Energy Agency has a higher estimate of 30.60 million bpd.

OPEC delegates warn reaching an agreement will not be easy when the group meets on Nov. 27 in Vienna, and oil traders and analysts are split over whether OPEC will be able to act to shore up prices.

Libya’s OPEC governor, who has called for a cut of at least 500,000 bpd, is the only other OPEC official publicly to put a figure on the size of the reduction needed.

Among other OPEC members, Algeria supports action to defend prices, Venezuela’s foreign minister said after talks with Algeria’s president, and Venezuela and Ecuador have also called for OPEC to cut output.

But Kuwait has said a reduction is unlikely and top producer Saudi Arabia has yet to comment publicly except to say that it favors a stable market.

Source from : Reuters