Saudi Official: No Drastic Oil Cuts
RIYADH, Saudi Arabia (AP) _ Oil production needs to slow down, but cuts will not be drastic, a Saudi oil official said.
The official, speaking Tuesday on condition of anonymity, estimated the surplus in the market at more than 1.5 million barrels.
He said production cuts would depend on the market at the time of an Organization of Petroleum Exporting Countries meeting later this month. But he ruled out the possibility of reducing production by 2 million barrels, saying such a move could leave the market unstable and would not be acceptable to consumers.
Saudi Oil Minister Ali Naimi had said over the weekend that OPEC is likely to approve reductions when its members hold their next regular meeting on Jan. 17 in Vienna. Naimi made his remarks after the six members of the Gulf Cooperation Council _ Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates _ called for production cuts at the end of a two-day summit in Bahrain. Similar comments have been made recently by officials from Kuwait and Venezuela, both oil producers.
OPEC increased production four times over the past year to bring once-soaring prices down.
In September, the price of oil in OPEC’s basket of crudes topped $30 a barrel, the highest level in a decade. But those prices have hovered closer to $20 lately thanks to OPEC’s production increases, more non-OPEC production and a mild European winter that has lowered demand for heating oil.