OPEC Favors Cut to Trim Stocks, Expects Russian Help (Update3)

Kuwait Push

OPEC, which agreed in October to reduce production by 1.5 million barrels a day from Nov. 1, has implemented 75 percent of the cut, said Khelil, who is also Algeria’s oil minister. Algeria has lowered production by 90,000 barrels a day and is producing 1.3 million barrels a day now, he said.


World demand will fall this year for the first time since 1983 as the global recession cuts fuel consumption, the International Energy Agency said last week.


OPEC will probably lower output targets by at least 2 million barrels a day, or 7.3 percent, when its members meet Dec. 17, according to 18 of 33 analysts surveyed by Bloomberg. Kuwait’s Oil Minister said the country will push for a cut at the meeting.

OPEC is “very pessimistic about demand” next year, Khelil said, adding that current stock levels are five days higher than the five-year average of 52 days.

Oil consumption will fall by 200,000 barrels a day in the first quarter of 2009, and a further 1.2 million barrels a day in the second quarter, before rising again in the second half of the year, he said.

The group will meet again in March and start to gather more frequently, Khelil said.

World oil demand is likely to fall by an average of 500,000 barrels a day next year because of high crude prices and slumping economies, the Centre for Global Energy Studies said in a report today.