OPEC studies output cut of up to 1 million barrels a day | TahoeDailyTribune.com

OPEC studies output cut of up to 1 million barrels a day

The Associated Press

CARACAS, Venezuela (AP) – OPEC is considering an output cut of between 700,000 barrels a day and 1 million barrels a day, the group’s secretary general told Venezuelan state news agency Venpres on Thursday.

The Organization of Petroleum Exporting Countries is considering Venezuelan President Hugo Chavez’s proposal to reduce production to stem a slide in oil prices, Ali Rodriguez told Venpres news agency by phone from Vienna.

He said ”we have to guarantee stability in the market.”

Chavez, who is on a tour of Europe, is trying to build consensus within OPEC to defend oil prices, which have been sliding since last month’s terrorist attacks.

In a meeting last month, OPEC decided to leave production intact, saying it did not wish to aggravate a fragile world economy after the Sept. 11 attacks. The group is scheduled to meet Nov. 14 in Vienna to re-evaluate the oil market.

The average price of crude oil in OPEC countries hit a two-year low of $19.61 per barrel Wednesday. The OPEC oil basket fell 14 cents from Monday’s price.

OPEC has a price band of $22 to $28 a barrel. The band system requires the group to cut production by at least 500,000 barrels a day if prices stay below $22 a barrel for 10 consecutive days but the organization has ignored the mechanism so far.

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