US Energy Secretary Bill Richardson arrived in Kuwait Sunday for talks aimed at convincing oil producers not to make "severe" output cuts in a bid to keep oil prices around $25 a barrel.
But a senior Kuwaiti oil official said the emirate will not budge from its position calling on the Organization of Petroleum Exporting Countries to make a substantial cut in output to shore up oil prices.
"The Kuwaiti position will not budge from a minimum cut of 1.5 million barrels per day (bpd)," the official, who spoke on condition of anonymity, told AFP.
"There is a real fear the huge rise in crude stocks (with consumers) may lead to a crash in oil prices" similar to the collapse in 1998 when oil prices dropped below $10 a barrel, the official added.
"Credible reports indicate that those huge stocks will not run out or drop considerably before next May. Reports also show that currently there is a surplus of 1.8 million bpd in the market," he said.
Richardson held meetings in Saudi Arabia, the United Arab Emirates (UAE) and Qatar on the need for oil price stability and the size of a planned output cut.
UAE Oil Minister Obeid bin Saif al-Nassiri, after talks with Richardson, called for a "fair price" but declined to specify the scope of the cut to be decided Wednesday at an OPEC meeting in Vienna.
"The UAE is concerned over stability on the oil market but it hopes for a fair and adequate price for producers," Nassiri said, quoted by the Gulf state's WAM news agency.
Richardson, whose country is the world's top oil consumer, said the UAE had agreed to take the US view into account and reiterated that $25 a barrel was a reasonable price target.
In Riyadh, Richardson said he had not received an answer from the kingdom over the size of the OPEC cutback, following talks with Crown Prince Abdullah bin Abdul Aziz and Oil Minister Ali al-Nuaimi.
The outgoing US administration official warned that a large reduction in production would push up prices and have an impact on the world economy.
"I have come with a message that oil-producing nations should not act precipitously to make severe cuts in production which would continue the instability that we have seen over the last two years," he said in Riyadh.
However, he said in Qatar that his tour of the region was "not aimed at exerting pressure" on oil-producing countries.
"If OPEC insists on reducing output, the US does not object to small cuts", said Richardson who renewed his plea for a $25-per barrel rate.
Richardson, who already held talks with OPEC president Chakib Khelil in Paris on Friday, said after the Gulf tour he would meet in London with Venezuela's new energy minister, Alvaro Silva Calderon.
The US official has proposed that a reduction of one million bpd "could be sufficient," according to Khelil.
Khelil told AFP that the cartel was likely to decide on a cut of between 1.5 million and two million bpd, but a date had yet to be agreed for when it would be brought into effect or whether it would be phased in.
A consensus was gathering for "at least" 1.5 million bpd, amid concerns of a "dramatic" price collapse if the cartel failed to act decisively, he said.
Kuwait's Oil Minister Sheikh Saud Nasser al-Sabah said last week the emirate would not accept an OPEC output cut of less than 1.5 million bpd, adding the "figure was not up for negotiation." – (AFP, Kuwait City)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
