Venezuela: Oil Minister Rafael Ramirez
Venezuela wants Opec oil output cut
Venezuelan oil minister, Rafael Ramirez said Opec should cut oil output by 1 million barrels per day, possibly before its next scheduled meeting in December, and should set a minimum price target of $70 or $80.
Ramirez said global demand for crude oil had slipped by 900,000 bpd because of global economic turmoil and warned sinking prices would cause oil investment to collapse worldwide.
Opec chopped production by 1.5 million bpd last week to stop oil's slide, after prices more than halved from a high of $147 hit in July. At around $65 per barrel oil is at its lowest level since mid last year, said a Reuters report.
Ramirez said too much oil was still reaching the market and another 1 million barrels should be trimmed, before December if demand kept on falling.
He said Venezuela will propose that Opec re-establish target price bands, either between $70 and $90 or between $80 and $100. In the past, the group has used bands to trigger output cuts or increases when oil moves outside the set range.
Venezuela's President Hugo Chavez hawkishly backs output cuts to support oil but says analysts and opponents are wrong to assert that at current price levels he will have to cut popular projects.
Analysts say oil prices are likely to fall further on global economic woes but that crude is unlikely to sink for long below the industry's $50-a-barrel average operating cost.
World demand for oil has dropped as the likelihood of a recession in the US grows.
Opec Secretary General Abdullah al-Badri said yesterday that the group may hold another meeting to review policy before its scheduled conference in December if prices keep falling.