CAIRO -- OPEC will cut back on oil production early next year in a bid to stave off a further decline in the world price, Kuwait's oil minister said yesterday.
The comments by Sheikh Ahmad Fahad Al-Ahmad Al Sabah revealed what delegates to the Organization of Petroleum Exporting Countries had agreed to in informal discussions ahead of their meeting today.
"Everyone has committed for next month, maybe to start from February," he said. He added that all members of the 11-nation organization were committed to complying fully with the current production ceiling of 27 million barrels a day.
Al Sabah estimated OPEC is producing about 1.7 million barrels a day above production quotas; others estimate 1.1 million.
The full OPEC meeting is expected to set production policy for the coming months.
Earlier yesterday, oil ministers held out the possibility that if crude prices continue to fall, OPEC could reconsider its production target early next year and lower it. Some OPEC members wanted a commitment to lower quotas immediately, but Ali Naimi, oil minister of Saudi Arabia, suggested those trial balloons had burst.
OPEC's production total reaches more than 30 million barrels a day once Iraq is included. Iraq, which produces about 2 million barrels a day, has been exempted from quotas to enable it to rebuild its economy.
Benchmark US crude futures have fallen by almost 25 percent since the record prices of more than $55 a barrel in late October. The decline has been sharpest in the last week or so, spurred by increases in US petroleum inventories, mild weather, and little sign of a slowdown in OPEC output.
"I think the price decline was expected, but the speed of the decline was a surprise," the oil minister of the United Arab Emirates, Mohammed bin Dhaen al-Hamili, told reporters. He said the first step should be to tackle the production that exceeds the quota.
Sweet crude for January delivery settled 59 cents higher at $42.53 a barrel in New York. January Brent was up 98 cents to $39.67 on the International Petroleum Exchange.