Saudi makes oil cut ahead of OPEC meet-OPEC chief
Mon 15 Dec 2008, 11:52 GMT
ORAN, Algeria, Dec 15 (Reuters) - The world's top oil exporter Saudi Arabia has already cut supply in anticipation of OPEC agreeing further curbs at its meeting on Wednesday, OPEC's President said on Monday.
Chakib Khelil said the kingdom's oil minister Ali al-Naimi informed him Riyadh had cut its supply by eight percent. OPEC's last overall cut of 1.5 million barrels per day (bpd), agreed in October, was just over 5 percent.
"Everybody is supporting a cut -- I don't have any doubt about it. The Saudis have already taken a decision ahead of the meeting, as you know, they have reduced their supply to the market by 8 percent, which has had an affect on the market," Khelil told reporters.
"The Saudi minister has declared he is producing 8.399 (million barrels per day)."
Khelil reiterated that OPEC ministers were in agreement on the need to cut output at the Wednesday meeting. The first ministers are expected to arrive in Oran later on Monday.
He said there was an oversupply of 400 million barrels in the oil market. OPEC is expected to make a cut of 1-2 million barrels per day, and Khelil was asked how long he thought it would take for a reduction to clear the overhang.
"If we decide on one (million bpd cut) it will take 400 days, if we decide two it will take 200 days," he said. Khelil said he expected global oil demand to drop by 200,000 bpd in the first quarter of next year and by another 1.2 million bpd in the second, but then to pick up.
Khelil, also Algeria's oil minister, was asked about possible Russian involvement in any OPEC output decision.
"They have already expressed their support -- we are hoping for concrete support," he said.
Asked whether Russia could join the group, he said: "We have always hoped they will join OPEC. Russia would give particular weight to OPEC."
With Russia on board OPEC would account for around 50 percent of world oil supply rather than around 40 percent at present, he added.
The head of Russia's LUKOIL said on Monday he expected Russia to offer an output cut of 200,000-300,000 bpd to support an OPEC reduction [nLF660884].
Analysts have said Russia is unlikely to become a member of the exporter group, although it regularly attends its meetings as an observer.
Monday, December 15, 2008