OPEC President and Venezuela Energy Minister said Friday to reporters that OPEC will cut automatically 500.00 barrels per day on Jan 8, if prices continue under $ 22.00.
"If these prices continue, below the lower limit of the ($22-28/bbl) price band, all members are in a unanimous accord to automatically cut production in 500.000 barrels per day, on January 8 ".
OPEC's price band mechanism triggers a 500,000 barrels a day increase if the basket price holds above $28/bbl for 20 consecutive trading days, or lower output by 500,000 b/d if the basket price moves below $22/bbl for 10 consecutive trading days.
Rodriguez also said, " in the OPEC meeting Jan. 17, oil ministers will study the whole market situation and a better idea of the evolution of the market, stock levels and the amount of speculation circulating among players, them we will make a decision on further cuts if necessary"
Rodrigues added, on Jan. 17, oil ministers would have a better idea of the evolution of the market."
We are looking very carefully at what is happening in the market - we have to analyze that." And reiterated Venezuela's view that there's a 1.4 million barrel a day oversupply in the market.
Rodriguez will arrive in Vienna to start his new job as OPEC secretary general on Jan. 5 and Venezuelan President Hugo Chavez is expected to name a new Energy minister and some new members of the PDVSA Board of Directors in the coming days.
By Elio Ohep
© 2000 Mena Report (www.menareport.com)
