OPEC seeks to reduce supply of global crude

Monday, December 13, 2004

CAIRO OPEC has agreed to eliminate excess supply in the global crude oil market.

OPEC oil ministers announced production would be decreased by one million barrels per day starting in 2005. The ministers have scheduled another meeting on Jan. 30, 2005 to consider additional cuts in its 27 million barrel per day production ceiling.

The ministers, who met in Cairo on Dec. 10, said oil stocks were increasing at a rapid rate and could harm the market in 2005, Middle East Newsline reported. The decision last week would withdraw 3.5 percent of the current oil supply. Half of the cut would be assumed by Saudi Arabia.

The United States was said to have opposed the OPEC decision. The Bush administration has urged increased production in an effort to reduce the price of crude oil. In late October, oil reached a record high of more than $55 a barrel.

Copyright 2004 East West Services, Inc.

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