Riyadh wants OPEC oil production slashed by 1.5 million to two million barrels per day to counter falling prices, a senior Saudi oil official told AFP on Sunday.
"Saudi Arabia backs a production cut," by OPEC, the top official said on the sidelines of a Gulf summit.
He said he expected the reduction to be "between 1.5 and two million barrels a day to maintain an appropriate oil price around $25 a barrel".
It was the first time Riyadh has clearly come out in favour of a major reduction in output since market prices peaked in October and then plunged.
Leaders of the six Gulf states in the Gulf Cooperation Council later threw their weight behind output cuts in a final declaration after a two-day summit in Manama.
Arab oil ministers from the Gulf would "work for a reduction in prdouction levels" at the OPEC ministerial meeting in Vienna on January 17, and "take all the necessary measures to ensure market stability", the declaration said.
But the declaration set no target figures for the reductions.
A Gulf official told AFP that non-OPEC producers should also be consulted on reductions.
Saudi Arabia has led production major increases this year as the 11-member cartel put up quotas four times in a bid to cool raging markets.
The Gulf monarchies -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates -- account for 45 percent of the world's oil reserves and provide around 20 percent of the world's crude.
The summit meeting in Bahrain has reviewed oil policy after crude fell further on the last trading session of the year in London on Friday. Prices dipped to eight-month lows as dealers remained confident that adequate supplies would continue to flood the market.
A barrel of Brent North Sea reference crude for February delivery fell to $23.05 from $23.71 at the close on Thursday.
In New York, the February light sweet crude contract fell 62 cents on Thursday to $25.85 a barrel.
Prices had been galvanised earlier in the week by falling temperatures in the United States and warnings from members of the Organisation of Petroleum Exporting Countries (OPEC) that it was time to slash output to boost prices.
OPEC countries have voiced fears that handsome windfalls which resulted from soaring crude prices earlier in 2000 could be eaten away if the market slumps.
Prices have already fallen by some 30 percent since peaking above $35 a barrel in October. OPEC President, Ali Rodriguez of Venezuela, said last weekend that if OPEC's basket crude price remained under $22 a barrel "production will be reduced by 500,000 barrels a day".
He spoke after OPEC's basket price had fallen below $22 for the first time in eight months. Iran and Kuwait have called for production to be cut by at least one million barrels a day.—AFP.
©--Agence France Presse.
© 2001 Mena Report (www.menareport.com)
