Kuwaiti Oil Minister Adel Al-Sebeih warned non-OPEC producers on Friday, November 16 that failure to cooperate with the oil cartel in reducing output to shore up prices would have "dire consequences" for both sides.
Lack of cooperation by non-OPEC producers "would have dire consequences for all producers," Sebeih told the state news agency KUNA after the Organization of Petroleum Exporting Countries agreed to slash output by 1.5 million barrels per day (bpd) from January 1 if non-OPEC rivals cut their own output by 500,000 bpd.
"A cut in (OPEC) output not matched by producers outside the organization will not have the impact on oil prices which OPEC states aspire to," said Sebeih, who took part in Wednesday's ministerial meeting in Vienna. Sebeih noted, however, that a number of major non-OPEC producers had responded positively to efforts to boost prices, while attempts were continuing to persuade others to cooperate.
"What we hope to achieve is a 500,000 bpd cut shared out among major (non-OPEC) producers in return for OPEC implementing its decision to reduce supply by 1.5 million bpd," the Kuwaiti minister said.
The oil cartel said on Wednesday it would cut production from its current ceiling of 23.2 million bpd by 1.5 million bpd from January 1, 2002, on condition that non-OPEC producers also cut output by 500,000 bpd.
Oil prices continued to slump after the Vienna meeting because OPEC's decision to slash output was conditional on the response of non-OPEC producers, Sebeih explained, warning that prices would continue to tumble unless a favorable response was forthcoming. All producers, not just those within OPEC, share the responsibility of checking the price slide, Sebeih added.
Prices plunged to new two-year low points on Thursday as OPEC energy ministers squared up for a possible price war with non-OPEC producers.
Brent North Sea crude for December delivery fell by about two dollars a barrel to a nadir of $16.80 dollars. The last time prices were so low was in June 1999. They later recovered somewhat to $17.55, down $1.20 from Wednesday evening.
In New York, December-dated light sweet crude futures tumbled as low as $17.15 a barrel, before climbing back to $17.95 -- down $1.8 from Wednesday's close. — (AFP, Kuwait City)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
