OPEC Expected to Lower Output Further
NEW YORK --- The Organization of Petroleum Exporting Countries is expected to lower output targets by at least 2 million barrels a day, or 7.3 percent, when its members meet Dec. 17, according to 18 of 33 analysts surveyed by Bloomberg.
NEW YORK --- The Organization of Petroleum Exporting Countries is expected to lower output targets by at least 2 million barrels a day, or 7.3 percent, when its members meet Dec. 17, according to 18 of 33 analysts surveyed by Bloomberg.
Saudi Arabia's King Abdullah said last month that his country needs oil priced at $75 a barrel to promote development. However, Goldman Sachs Group Inc. has predicted that crude may slide to $30 from $46.28 today, Bloomberg reported.
Oil's $100-a-barrel collapse since July has created government budget shortfalls. Ecuador, a member of OPEC, said last week it will default on foreign debt. What's more, the U.A.E., Kuwait and Qatar need crude prices above $55 to balance their current accounts and fiscal spending, Citigroup Inc. estimated.
Prices fell from a record $147.27 on the New York Mercantile Exchange in July to a four-year low of $40.50 just five months later, Bloomberg reported. Crude for January delivery rose as much as $2.72, or 5.9 percent, to $49 a barrel in electronic trading on the New York Mercantile Exchange. It was at $48.54 at 11:14 a.m. today in London.
OPEC Secretary-General Addalla el-Badri said a sizeable output cut is needed to remove excess supplies from the market. "Stocks are very high, we need to take action at this time," he told reporters when he arrived at his hotel in Oran today.
President Chakib Khelil said Dec. 11 that ministers agreed that a major cut is needed at the meeting this week in Oran, Algeria. Qatari minister Abdullah bin Hamad al- Attiyah, Venezuela's Rafael Ramirez and Libya's Shokri Ghanem also said they favor reducing supplies.
The group previously agreed in October to reduce production by 1.5 million barrels a day, starting Nov. 1.
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