Iran General NewsIran favours OPEC cut of 1.0 to 1.5m bpd

Iran favours OPEC cut of 1.0 to 1.5m bpd

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ImageAFP: Iran, OPEC's number two oil producer, favours a cut in crude production of 1.0 to 1.5 million barrels per day when the oil cartel meets in Cairo later this month, state television reported on Saturday.

ImageTEHRAN (AFP) — Iran, OPEC's number two oil producer, favours a cut in crude production of 1.0 to 1.5 million barrels per day when the oil cartel meets in Cairo later this month, state television reported on Saturday.

"It is best that at the urgent meeting in Cairo a decision be made for another decrease of one million to 1.5 million barrels per day," Iran's OPEC representative Mohammad Ali Khatibi was quoted as saying on the broadcaster's website.

"Thus, a balance between supply and demand is reached," Khatibi said, adding that the extent of any potential cutbacks would depend on whether the global financial crisis deepened or not.

The Organisation of Petroleum Exporting Countries cartel is scheduled to hold an extraordinary meeting on November 29 in Egypt amid speculation that member nations will agree to cut output in a bid to boost plunging oil prices.

Prices of crude have collapsed by about two-thirds since striking record peaks above 147 dollars in July on concern that a prolonged global recession could slam the brakes on energy demand.

That, in turn, has sparked alarm among the OPEC cartel, whose member nations pump 40 percent of the world's crude supplies, because their oil revenues have been slashed.

OPEC agreed on October 24 to reduce production by 1.5 million barrels a day from November 1, but prices have continued to slide since then.

Khatibi warned against oversupply and said that the members violating the cartel's set quotas would push down prices.

"OPEC countries should know that they must remain committed to their obligations, otherwise prices will fall even further," he said.

"The downward trend of oil prices and an increase in the stockpiles of large industrial countries indicate an oversupply."

The cartel, which will also meet as scheduled in Oran, Algeria on December 17, has made it clear that it would consider another output reduction if the price of crude remains below 70 dollars a barrel.

"In their latest comments, OPEC members have favoured an oil price of between 70 dollars and 100 dollars a barrel," Khatibi said in an interview broadcast later on state television.

"Prices below these figures will trouble oil investment and the production cycle of these countries," he added.

Oil prices closed mixed on Friday amid growing signs of economic woes in the US and Europe, despite the possibility of a new output cut.

On the New York Mercantile Exchange, light sweet crude for December delivery fell 1.20 dollars a barrel to close at 57.04 dollars.

In London, Brent North Sea crude for January rose 2.25 dollars a barrel to settle at 54.24 dollars on the InterContinental Exchange.

Khatibi also called on non-OPEC oil-producing countries to join the cartel's bid to help the market.

"We need non-OPEC members to cooperate with OPEC… and decrease their production somewhat. If they raise production, it merely counteracts the OPEC measure," he said.

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