Saudi Oil Minister Ali al-Nuaimi and Mexican Energy Minister Ernesto Martens held talks in Riyadh on Sunday and aimed for a joint stand with Venezuela ahead of an OPEC meeting that is expected to cut oil production, reported the Saudi Press Agency (SPA).
Nuaimi, in a brief statement to the agency, praised "the good relations between the kingdom and Mexico in their coordination on the oil market."
The talks, covering "the current situation on the oil market", are to be expanded to include Venezuelan Energy Minister Alvaro Silva Calderon after his arrival on Monday, a Saudi oil ministry official was quoted by the agency as saying.
The three ministers were to discuss the supply and demand situation on the world oil market, a Mexican diplomat said, before leaving for the March 16 meeting in Vienna of the Organization of Petroleum Exporting Countries (OPEC).
Martens, whose country is a major non-OPEC producer, will travel to Vienna for talks on the sidelines of the cartel's meeting, said AFP.
Mexico, Saudi Arabia and Venezuela were instrumental in building a consensus on output cuts in 1998 and 1999 that triggered a tripling of oil prices after a collapse to 10 dollars a barrel.
The Vienna meeting is to study forecasts for supply and demand for the rest of 2001 and current stock levels in consumer countries, added AFP.
The gathering should help determine the level of oil production as world demand slows with the end of winter in the northern hemisphere.
A Saudi official said last month that a cut would only be decided "after a market study and consultations with OPEC countries and other producers such as Norway and Mexico."
The cartel will also examine "how much of the price level at the time of the meeting in Vienna can be attributed to supply-demand fundamentals and how much to speculation about the meeting's outcome," said Middle East Economic Survey.
"This last factor is a new consideration for OPEC, which ... has begun taking measures to counter the effects of speculation and manipulation of markets," the industry newsletter was quoted by AFP as saying.
Most countries in OPEC, which already slashed output by 1.5 million barrels per day (bpd) on February 1, have set a target of keeping oil prices at around 25 dollars per barrel.
OPEC's president, Algerian Energy Minister Chakib Khelil, on Saturday raised the prospect of another production cut to keep prices around 25 dollars, but did not specify the volume, said the agency.
Qatar's Energy Minister Abdullah bin Hamad al-Attiya, meanwhile, also said he expected OPEC to decide on a cut to make up for oversupply on the world market.
In London, oil prices dipped Friday as the market waited for indications on the size of an OPEC cut. A barrel of Brent North Sea crude for April delivery dropped to 26.47 dollars from 26.68 dollars at the previous close.
"There seems to be a growing consensus that OPEC will cut output between 0.5 and one million barrels per day at the meeting, but there does not seem to be a consensus on what will happen to prices after that," said the GNI brokerage house.
In its latest report, the Paris-based International Energy Agency forecast in February that growth in world demand for oil would be sharply undercut by a slowdown in the global economy during 2001.
"World oil demand growth in 2001 has been cut by 140,000 bpd to 1.5 million bpd," it said. "High crude prices and mild weather in Europe and Asia explain only part of the disparity ... The global economy is slowing, curbing demand." – Albawaba.com
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