Speaking out: Chakib Khelil
Opec may call fresh talks if oil falls
Opec could decide in mid-January to hold an extraordinary meeting before March if it sees that global oil prices continue to slide because of weakening demand, the group's president Chakib Khelil said today.
Khelil said he expected Opec members to fall in line quickly with the group's latest round of production cuts and he rebuked Russia, calling on the world's number two exporter to stop merely benefiting from Opec's policies and contribute with output cuts of its own.
"We will review the market again and make a proper decision if we see that prices still continue sliding despite the compliance," Khelil told Reuters in Moscow on the sidelines of a meeting of Gas Exporting Countries Forum (GECF).
Some Opec ministers will attend an Arab economic summit scheduled for 19 January in Kuwait which could be a forum for the group to look again at the oil market situation, Khelil said.
"By 12 January, if we see that prices are still going down, we will call the meeting and call non-Arab members like Venezuela, Angola and Ecuador to come to that meeting and make a decision when (to meet)," he said.
Last week, Opec oil ministers agreed at a meeting in Algeria on their deepest output cut, of 2.2 million barrels per day, in a bid to balance supply with rapidly crumbling demand.
The move failed to impress the markets and the price of oil fell yet further to below $40.
"We have all opportunities to correct our decision. We are trying to catch up with the demand as best as we can estimate things. As long as the market doesn't stabilise we will still keep running after catching up the demand," he said.
Khelil said he expected the overall compliance of Opec members to be good as otherwise prices could fall ever deeper.
"I think by February we should see at least (compliance of) 80%," he said.
He said Opec saw global demand falling by 200,000 bpd in the first quarter and by another 1.2 million bpd in the second quarter: "So I think all members are aware and I think there will be full compliance by 15 March".
Opec repeatedly called on non-Opec producers to join production cuts at its meeting in Oran, Algeria but only secured a pledge from Azerbaijan to commit 300,000 bpd. Russia refrained from making firm pledges despite saying previously that it could do so.
Khelil said Opec was disappointed.
"Well, they (Russia at the meeting in Oran) proposed everything except for a reduction... And maybe the reaction of the market was negative because of that," he said.
"But wait... If there were no Opec reductions in September and October, I think we would have seen prices today at maybe $20 (per barrel). So it was because of Opec that revenues for Russia were at $40 now not at $20...," he said.