OPEC president: Oil cuts likely if no price rally

ALGIERS, Algeria — OPEC nations could further reduce oil output if moves last month to slash production do not bolster plummeting oil prices, OPEC president Chakib Khelil said Saturday.

Khelil, who is also Algeria's energy minister, said an OPEC report would show by the end of the month whether all cartel members have enforced the daily 1.5 million barrel reduction decided in October.

He said he hoped the production cut would raise and stabilize prices at a level manageable for both oil-exporting countries and consumer nations.

Reasonable prices should range "between $70 and $90 per barrel," said Khelil, who currently holds the rotating presidency of the Organization of Petroleum Exporting Countries.

Oil prices have traded at around $60 a barrel this week. On the New York Mercantile Exchange, light, sweet crude for December settled at $61.04 a barrel on Friday, but the contract dropped below $60 in overnight electronic trading for the first time in 19 months. That was down dramatically from record highs of more than $140 a barrel in July.

But predicted recession in the U.S. and Europe means demand for oil will continue to decline, Khelil told a news conference in Algiers, adding that rising energy needs in China and India would not be enough to boost oil prices.

OPEC countries "will therefore probably continue to reduce their production, in order to maintain a balance between supply and demand, at least through the beginning of 2009," Khelil said.

This policy is not fully decided yet, and Khelil said further output decisions would likely depend on how markets react to the current cut once it is fully enforced.

The minister is preparing to host OPEC's yearly summit, due in the western Algerian town of Oran on Dec. 17.

Price stability is crucial to countries like Algeria, where more than 95 percent of revenue comes from hydrocarbon exports. The North African nation has the eighth-largest reserves of natural gas, and ranks 14th in oil reserves.

Comments

[LemonMeringue]

It is time to regulate the price of oil.

It is time to get serious about changing to solar, wind, wave. The nation is filled with industrial buildings with flat roofs - look down next time you fly - and there should be solar panels on every single one.

[EinChicago]

For a hawk like Khelil, these are really wishy washy comments which indicate OPEC's weakened position. With Bu$hco, they had ready collaborators who were ready and eager to help drive prices sky high. Now the dynamic has vastly changed. Instead of an administration populated by oil industry puppets, they have one populated by people chomping at the bit for any excuse to whip up public saupport for alternative energy funding. OPEC is on dodgy ground now and they know it. $90 per barrle is tough talk but not feasible because it would give Obama all the cannon fodder his admin needs to pump hundreds of billions into alternative energy infrastructure. OPEC is looking at $20-30 per barrel by early 09 and they know it and they're just posturing to try and defend the $50-60 price they currently have.

[majorteddy]

Our enemies, the people of OPEC are in trouble. They have lost their BFF, DICK Cheney.

[LemonMeringue]

And Sarah Palin was their new best friend.

[PT6]

The Middle East is the center of Bush's manipulation of the Oil Markets!

Any crisis in the Middle East Causes the cost of Crude Oil to go upward and that helps Texas and other Oil Companies make ever higher HISTORIC Profits!

It also insures that the military contract corruption can continue so they can continue to charge $40 per soldier's meal and $99 per bag of laundry.

Crude will drop to its PRE-BUSH levels now that he is leaving! That was as low as $1 per gallon.

The Illegal 30 to 1 Leveraging, and even higher, lead to the ridiculous $147 per barrel price of crude and to $5 per gallon diesel prices and over $6 in Canada! It is now down to $60 per barrel and diesel and gas prices will drop below $1.80 per gallon.

As the Crude Oil Price unwinds to its pre-Bush levels we will see a boost to America's Economy, but we must find alternatives to prevent this level of corruption from ever causing such manipulation to happening again!

[PT6]

Crude will drop to its PRE-BUSH levels now that he is leaving! That was as low as $1 per gallon.

The Illegal 30 to 1 Leveraging, and even higher, lead to the ridiculous $147 per barrel price of crude and to $5 per gallon diesel prices and over $6 in Canada! It is now down to $60 per barrel and diesel and gas prices will drop below $1.80 per gallon.

As the Crude Oil Price unwinds to its pre-Bush levels we will see a boost to America's Economy, but we must find alternatives to prevent this level of corruption from ever causing such manipulation to happening again!

[Counterglow]

Since the auto industry is going cap in hand to the federal government for a bail-out, perhaps now would be a good time to make any help they get conditional on their building cars that, one way or another, help wean the United States off its addiction to Arab oil.

[fan4truth]

We only get a small amount of our oil from OPEC nations. Much of it comes from Nigeria, and Venezuela, as well as our own local oil production.

We need to stop our dependence on foreign oil, but it isn't from the countries that we think it should be from.

I wonder about the price speculation that has driven up the cost of oil in this country to never before seen highs. CalPERS (California retirement plan for state employees) and other large employee retirement plans invest billions of dollars into energy, and they may be the ones pulling out of the energy markets now.

Maybe it was all the speculation in oil that drove the prices up after all.

[grumbles]

Cut Production! CUT! CUT! CUT! That's what I say. The quicker the Arabs overplay this teetering economy, the quicker American people will finally realize that the future depends on our innovation and capacity to invent. We are our BEST natural resource. Our innovation, persistance and determination, and our unfailing moral compass are the hallmarks of the American spirit. We may never be totally independent of the world's oil,but we have the capacity to take our most dependent industry, automobiles, and make it totally independent of the world's oil. It is time to get to work. We have enjoyed many years of freedom, joy, and plenty. Now we must labor for the country we love......

[MCTSilverlakeCA]

I agree...and OPEC/ LISTEN WELL... you cut production to raise prices, and we'll cut USEAGE until we're all carpooling over here at 6 to a car... or walking, or bicycling, or train riding and we'll do it too..you see, we just got rid of one DICTATOR and his cronies., and we're not putting up with another one...

On a related note: I recall old Popular Mechanic's and Popular Science magazine articles that used to show how to use other oils and substitute gasoline's ...and such things as how to build your own "solar engine" etc... time I think we start using some of the brains this country has developed in the past 50 years ... things that Big Business repressed to keep selling us Oil and Gasoline for Big Profits..for THEM... and in so doing... reduce still further --our need for Foreign Energy..

[sparkey]

The price of oil keeps going down. That must be the reason why the price of gas just went up today. Of course, the elections are now over. I see the prices going back up to four dollars by the end of the month. The reason will given that Thanksgiving and Christmas driving will increase. Just more lies.

[Dystopic]

I don't see it. $4 per gallon gas was pridicated by $140 barrel crude.

I filled up yesterday 11/08/2008 and I paid, for premium $2.07 per gallon.

[Horus45]

Same here, I filled up yesterday for $2.17 per gallon here in Arizona.

[mindylovesobama]

They are the true cause of the world wide economic disaster. Anyone that can't see it is freakin' blind.

[gakabani]

OPEC needs to be put on notice that we will not take it anymore. ut also we need to put on notice Congress. Congress has not done its job for the last 40 years or so. Now it is our turn, we need energy independence now or we will be slaves of these countries for many years to come with a heavy burden on our future generations. Read the notice of the new mini nuclear reactors, it is good news for all but we need to think about the rad waste for disposal.

[pathlessland]

We need to get beyond sitting on pins and needles as OPEC makes decisions about produciton levels. Energy independence is still critical, despite the recent drop in the prices of oil and gas. We shouldn't be lulled into a false sense of security and lose our focus on this. For a deeper perspective, please click on http://www.pathlessland.net/politics-journal/2008/8/22/oil-and-the-new-cold-war.html

[Giftedd]

It's an abomination that here at Yokosuka Naval Base Japan people are still paying $4.06 for a gallon of ags at the pump. This is the price that was hiked to when oil prices went up to $145.00 a barrell. Will someone please talk to the Navy Exchange (NEX) to correct this injustice and rip off.

[leeoakfire]

Bicycles are the answer! If people would bike more, and drive less, then we would all be better off. Any trip which is under two miles should not be done by burning fossil fuels. And, many trips over two miles can be done by bicycle.

[Paul]

You are correct. Bicycles are probably the most efficient way to move a human over a road.

[fan4truth]

I agree. I think if more people purchased bicycles and used them as a means of getting around, there would be fewer auto wrecks on the road (obviously), no need for any oil and more americans would be healthy.

BTW: Tricycles with a basket would be perfect for grocery shopping!

[MyTake]

Confused.I.Am

The OPEC thugs, yet again, are going to use their "oil spigot" to price fix oil.

GM, who don't how to apply technology and give us a 80 mpg carburetors, are now at the door of government with their cup-in-hand.

Yet, over in Africa, GM is showing off their Cadillac Hydrogen Fuel Cell Car as shown here: http://www.engineeringnews.co.za/article.php?a_id=146540 yet neither they or Exxon will put a hydrogen gas pump on Exxon's service station lots so that hydrogen fuel cell cars can be sold in the U.S..

Actresses Jamie Lee Curtis, Laura Harris and Producer Ron Yerza are happily driving their Honda FCX hydrogen fuel cell cars now! Actresses Joely Fisher and Laura Dern are leasing their BMW Hydrogen 7 Series fuel cell cars with metallic blue paint!

I say, since Honda now have a production line for hydrogen fuel cell cars and have 50,000 customers lined up to get one, Obama and the Michigan Governor should offer Honda zero taxation to set up a North American fuel cell vehicle production line and offer the same deal to any independent business own and operate hydrogen gas stations.

Switching to the hydrogen economy would put these OPEC thugs back to the days of riding their camels!

[KillTheMessenger]

That you are confused is quite the understatement. :-)

[Dystopic]

we should switch to the Zero Point Energy economy. Enough energy in an empty coffee cup to power the world for a year

[EinChicago]

"Actresses Jamie Lee Curtis, Laura Harris and Producer Ron Yerza are happily driving their Honda FCX hydrogen fuel cell cars now! Actresses Joely Fisher and Laura Dern are leasing their BMW Hydrogen 7 Series fuel cell cars with metallic blue paint!

I say, since Honda now have a production line for hydrogen fuel cell cars and have 50,000 customers lined up to get one, Obama and the Michigan Governor should offer Honda zero taxation to set up a North American fuel cell vehicle production line and offer the same deal to any independent business own and operate hydrogen gas stations."

The unresolvable problem, at leats in the short term, with your idea , is effectively the same as it was in 2001 with the EV1 and EV2. Each FCX and BMW Hyd7 cost hundreds of thousands/millions to manufacture. The technology is a nice idea, but who would subsidize that cost so it would be feasible? We could have all had electric cars in 2003 and GM would have been more than happy to keep making them...if we were all willing to pay $200K each for one or if the government would provide a $180K per car susbsidy. GM could not afford to take a $150k + loss on each car sold.

[Samalabear]

Even with lower gas prices, families are struggling big time. Food is still going up and up and up. From a lot of comments I've read on these boards and elsewhere, people are still committed to keeping consumption low and getting away from dependence on oil. Unless you're really dumb you know that oil will go up again and it will be more painful the next time.