The OPEC oil cartel is set to slash output by up to 1.5 million barrels per day (bpd) this week to boost slumping prices, while stressing that support by other key producers is crucial to avoid a total market collapse.
The 11-member group, which produces 40 per cent of the world's oil, received a much-needed boost prior to its Wednesday meeting when Russia announced plans to cut oil exports to stabilise prices. Crude prices, which have slumped to two-year lows below 20 dollars a barrel amid growing global recession fears since the September 11 terror attacks, rebounded at the end of the week, notably on the Russian announcement. "I don't think it's enough to get prices back to 25 dollars a barrel, but maybe to the lower range of the price band" of 22-28 dollars, said Lawrence Eagles, a commodities expert with the GNI brokerage.
The Organisation of Petroleum Exporting Countries (OPEC) has faced a serious dilemma in responding to the global price slump since September, which has seen prices plummet 30 per cent in two months. Bureau Report