OPEC to cut oil output by 500,000 bpd

September 9, 2008

, VIENNA, September 9 – OPEC will agree to cut its real output by up to 500,000 barrels per day at its meeting on Tuesday while leaving its official production policy unchanged, energy consultancy PFC Energy said, citing unnamed sources.

"PFC Energy has learned that OPEC has in principle agreed to trim production from current levels above official output targets," said the respected Washington-based group.

"PFC Energy understands that a cut in actual production could be in the order of 500 (thousand barrels per day), but that the communique text will likely focus on the need to abide by agreed-upon production targets rather than on numerical targets for cuts," it added.

Many analysts expected the 13-nation group to agree to trim its output informally before waiting until later in the year to alter its official output target.

The trimming would be achieved by members, mainly powerhouse Saudi Arabia, agreeing to cut excess production above their OPEC quota, which would remove oil from the market but not amount to a formal change in policy.

PFC said the group might meet again in November, a month before the next scheduled gathering in December.

At present, the Organization of Petroleum Exporting Countries (OPEC) is believed to be producing about a million barrels per day (bpd) more than its official ceiling of 29.67 million bpd, with Saudi Arabia accounting for most of the excess.

Iran has led efforts to secure a clampdown on production above OPEC quotas.

Saudi Arabia has been producing record amounts of oil, around 9.6 million bpd in July, while its quota is for only 8.94.

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