OPEC countries have reached an agreement in principle on cutting oil output by 1.5 million barrels a day, Kuwaiti oil minister Sheikh Saud Nasser al-Sabah said here Tuesday.
Arriving for a key meeting of energy chiefs from the Organisation of Petroleum Exporting Countries (OPEC), al-Sabah said the 11-nation cartel had to take action to rescue prices, which fell sharply in December.
"The minimum will be 1.5 million" barrels a day, he told reporters outside his hotel in central Vienna ahead of Wednesday's OPEC meeting on output levels.
Asked whether consensus on a 1.5-million-barrel cut would be easy to achieve, alSabah said: "We have an agreement already. That is what I have been told.
"This is an extraordinary meeting," the Kuwaiti said. "The only reason for it is the decline in prices and we have to take decisions to rectify the prices."
Crude futures have fallen from above 35 dollars a barrel in October to between 24 and 26 dollars in London this month. Prices have shown signs of an upturn however, as talk of the OPEC squeeze filtered through to markets.
Other OPEC ministers have also committed to a production cut to underpin prices.
"We need a cut but how much depends on consultations," said Iran's Bijan Namdar Zangeneh.
Indonesia's Purnomo Yusgiantoro said he expected a cut of 1.5-2 million barrels a day. OPEC President Chakib Khelil offered the same forecast.
Qatar's Abdullah bin Hamad al-Attiyah said he favoured a cut of two million barrels a day, but insisted that OPEC would keep close tabs on the market to ensure it is not starved of crude, particularly as Iraqi export volumes are still low following a row with the United Nations.
"We would watch and we will not let the market be shocked either very high or very low," he told reporters. "We will not allow a shock either for consumers or for producers. We will be there at the right moment."
Earlier, Ali al-Nuaimi of OPEC kingpin Saudi Arabia said he expected a cut of "around" 1.5 million barrels a day, but did not rule out a further tightening of the taps before the northern hemisphere winter ends.
AFP