With the average price of the OPEC basket of crudes running below $25 a barrel, the cartel may well decide not to cut its production when the group next meets on March 16th, OPEC Secretary of General Ali Rodriguez said on February 25th.
In an interview with several Venezuelan newspapers, Rodriguez said that: “If we see the price continues to hover around $25 a barrel … if the average of the basket is maintained, there wouldn’t be any additional cuts at the March meeting and only an extraordinary ministers meeting will be called.”
The OPEC basket price on February 22nd, the most recent day the price was available, stood at $24.48 a barrel.
Rodriguez’s comments contradicted statement he made last week in which he stated there was a near “conviction” among OPEC members for the need to cut output at its March gathering, suggesting a reduction of as much as 1 million b/d.
The cartel announced a 1.5 million b/d output cut at its mid-January meeting to take effect from February 1st.
Despite concerns from Western consuming nations about the impact that OPEC’s decision would have on crude and product prices, the group argued then that lower seasonal demand in the coming quarters and a downturn in Western economies justified the move.
Venezuelan President Hugo Chavez indicated last week, after a trip to Saudi Arabia and Qatar, that OPEC was in agreement on not letting crude prices fall.
© 2001 Mena Report (www.menareport.com)
