Libya considers oil cut

October 20, 2008

, TRIPOLI, October 20 – OPEC member Libya on Monday said it was in favour of a production cut of more than one million barrels of oil per day ahead of a cartel meeting later this week.

The Organisation of Petroleum Exporting Countries is due to hold a special meeting on Friday at its headquarters in Vienna to announce production cuts amid falling oil prices.

"A cut in production by one million barrels per day is not enough to re-establish equilibirum on the market," Oil Minister Shukri Ghanem told AFP.

"One million (barrels per day) is little. Offer exceeds demand by much more than one millon barrels per day," Ghanem said.

The Libyan oil minister also said he was opposed to production cuts in stages.

Earlier on Monday, Iran\’s ambassador to OPEC said that the cartel may agree to cut oil production in stages when it meets in Vienna.

"Different figures (for the size of cuts) are being talked about among OPEC members," Mohammad Ali Khatibi was quoted as saying by the official IRNA news agency, adding that suggestions range from one to three million barrels a day. "If three million barrels are cut at one time from OPEC\’s production, the market will recover, but there is a possibility that this cut will occur in a number of stages and it appears that OPEC is ready to cut a million barrels per day in the first stage," he added.

Qatar\’s Energy Minister Abdullah bin Hamad al-Attiyah predicted on Friday that OPEC will cut oil output by at least one million barrels a day.

Oil prices had reached a peak of 147 dollars a barrel earlier this year but slumped below 70 dollars on Thursday for the first time in more than a year, dragged down by prospects for reduced demand in the face of a global economic slowdown brought on by the world financial turmoil.

On Monday oil prices rose two dollars on growing signs that OPEC will announce production cuts at the Vienna meeting, with New York\’s main contract, light sweet crude for delivery in November, at 73.94 dollars a barrel.

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