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Chavez Wants to Cut OPEC Output
OPEC must cut oil output by 1 million barrels a day to stop crude prices from collapsing as demand dwindles, but cartel members need the cooperation of key non-OPEC producers such as Mexico and Russia, Venezuela's president Chavez said Tuesday.
OPEC representatives are meeting on Nov. 14 to assess market conditions and consider a possible cut in output. The group has reduced its official production three times this year already, most recently by 1 million barrels a day Sept. 1.
Iraq is the only cartel member to join Venezuela in calling publicly for another production cut next month.
Chavez spoke to reporters after meeting with Prime Minister Tony Blair at the British leader's offices. Blair, he said, shared his concern about instability in world energy markets following the Sept. 11 attacks in the United States.
OPEC's official output target is 23.2 million barrels a day. The group supplies almost 40 percent of the world's oil, though Chavez said its members currently pump about 1.5 million barrels above their quotas.
Venezuela, traditionally one of OPEC's biggest quota busters, has transformed under Chavez's leadership into one of its most responsible members.
Chavez arrived in Britain on Monday from Russia as part of a 21-day tour aimed at gathering support for a production cut from key non-OPEC countries. He met also with the leaders of OPEC nations Saudi Arabia, Iran, Libya and Algeria, and he said his counterparts there ``fully agree'' with his proposal to curtail output.
Chavez and other OPEC leaders fear that a sharp decline in air travel and overall economic activity could cause the price for a barrel of oil to tumble below $10. Prices are already well below OPEC's target price of $25 a barrel.
December contracts of Europe's benchmark crude, North Sea Brent, were down 11 cents to close at $20.94 a barrel on the International Petroleum Exchange in London. Light, sweet crude was down 41 cents to close at $21.85 a barrel on the New York Mercantile Exchange.
Although the United States and other major oil importers are grateful for cheaper crude, Chavez argued that more expensive oil was not an element in the current global slowdown. Prices are out of equilibrium now, and a new ``balancing'' of oil prices wouldn't impede an economic recovery, he argued.
OPEC representatives hope to meet on Oct. 29 with delegates from non-OPEC countries in an effort to forge a common production strategy. Angola, Oman, Russia, Mexico and Kazakstan are among the non-OPEC producers invited to attend the meeting at OPEC headquarters in Vienna, Austria.
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