Opec may need to cut oil output to bolster prices, oil ministers said today as the exporter group discussed holding an emergency meeting to discuss the impact of the financial crisis.
The group plans to meet on November 18th in Vienna, Algerian state news agency APS reported, quoting an unnamed source. Libya's top oil official told Reuters a meeting on that date was under consideration.
Nigeria, Qatar and Iraq, all members of the Organisation of the Petroleum Exporting Countries, earlier today floated the idea of a cut in the group's oil output. Oil sank to a 10-month low near $86 a barrel.
"There may be a need to intervene to balance the market, if the price slide seemingly predicted on demand and over-supply continues," Nigerian Oil Minister Odein Ajumogobia said.
Oil fell as low as $86.05 a barrel today on expectations weaker economic growth will slow oil demand. While the falling price has been a relief for consumer countries, Opec members rely on oil revenues.
The group's 13 members pump about two in every five barrels of oil. Small producer Qatar said Opec will cut supply if the financial crisis slows demand, but it was too early to say how much consumption would be affected.
"If the market needs a cut, we will cut," Qatar's Oil Minister Abdullah al-Attiyah told Reuters.
"We will supply what the market needs. With the slowing economy, maybe we will see a fall in demand, but it's not clear yet."
But Saudi Arabia, Opec's largest producer and the country which would be expected to lead any further supply cut, has yet to comment publicly on the oil market. Oil rose briefly today after the US Federal Reserve led a global round of interest rate cuts to bolster the world economy.
On a visit to Turkey, Iraq's oil minister said Opec may need to consider cutting output if the price of crude remains below $90.
Reuters