OPEC is set to agree to a possibly bigger than expected production cut on Wednesday to boost flagging oil prices, despite warnings that the move will send crude prices soaring and threaten global economic growth. The 11-nation Organisation of Petroleum Exporting Countries (OPEC) wants to slash production by at least 1.5 million barrels a day - more than five percent - from February 1 to underpin world crude prices.
The cuts will be between 1.5 and 2 million barrels per day, said outgoing OPEC secretary general Rilwanu Lukman.
“There is an agreement. But the figure will be published on Thursday,” said OPEC secretary general Ali Rodriguez after discussions with OPEC ministers who arrived on Tuesday, ahead of the formal meeting.
World markets have widely anticipated a cut of about 1.5 million barrels per day in a bid to boost prices which have slumped dramatically in the last two months, after spiking to 10-year highs last year.
Qatari oil minister Abdullah Al Attiyah said on Tuesday that consensus appeared to be gathering around 1.5 million bpd. Most ministers are agreed on that figure, He said.
But some OPEC hawks want even deeper output cuts to stabilise market supply and demand. Iraq has called for cuts of up to three million barrels a day, while others have mentioned two million as the required volume.
But from Japan to Europe and the United States, oil importers fear that the sharp cut in OPEC volumes could send crude prices soaring again.
Bureau Report