OPEC Told to Cut Oil Output by Energy Giant

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Last updated at: (Beijing Time) Tuesday, June 24, 2003

OPEC Told to Cut Oil Output by Energy Giant

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Anglo-American energy giant BP Plc said the Organization of Petroleum Exporting Countries (OPEC) need to cut oil output in the fourth quarter of this year to stop oil prices from falling once Iraq oil enters the market, the daily Jakarta Post reported Tuesday.

BP energy analysis head Michael D. Smith said the current crude price of between 26 US dollars and 27 dollars per barrel was "not fundamentally strong" as it was caused by low oil stocks, particularly in the U.S. market.

"It (the low stock) helps underpin the price of oil. But the supply is now coming back. If Iraq comes back to the market, we'll have more supply of crude. Then, unless OPEC takes some action to reduce their production, we are like to see some movement (on the price)," Smith said.

He added cutting output was necessary for OPEC to defend its price target of between 25 dollars and 26 dollars a barrel.

In its recent ministerial meeting in Doha, Qatar, OPEC decided to maintain its current output until the next meeting scheduled for September this year.

Meanwhile, BP's Statistical Review of World Energy says Indonesian oil production was down by 8.1 percent in 2002 or 1,278bpd compared to 1,389 bpd in 2001.

The country's oil consumption also fell 1.7 percent or 1,072 bpd in 2002 from 1,090 bpd per day.

However, Indonesia's natural gas production is up by 6.4 percent or 66.3 billion cubic meters in 2001 to 70.6 billion cubicmeters in 2002.

Natural gas consumption also increased 4 percent from 33.4 billion cubic meters in 2001 to 34.7 billion cubic meters in 2002.

Energy consumption growth in emerging economies had been particularly robust during 2002, the review says. Non-OECD Asia Pacific (excluding Japan, South Korea and Australia) countries experienced growth of almost 11.5 percent.

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