Three key oil producers to meet on output cuts

CARACAS - Oil ministers from Venezuela, Saudi Arabia and Mexico plan to discuss production cuts to avoid an oil price crash in 2004, Oil Minister Rafael Ramirez said yesterday.

By (AP)

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Published: Tue 28 Oct 2003, 11:39 AM

Last updated: Wed 1 Apr 2015, 9:45 PM

"We haven't agreed to a date of the meeting but we will surely meet before the Opec meeting Dec. 4," said Ramirez, speaking to reporters before opening an oil business seminar.

Ramirez said he would meet with Saudi Arabia's Oil Minister Ali Naimi and Mexico's Felipe Caldron sometime in mid-November. He said there was no exact location or date yet.

There is no reason for the Organisation of Petroleum Exporting Countries to raise its output at the December meeting, Ramirez said, but he added that Opec may need to reduce output in order to avoid a price crash in early 2004.

"We don't believe it is necessary to increase output," Ramirez said. "But leaving output unchanged is the other option, but certainly no increase."

Venezuela, Mexico and Saudi Arabia brokered a deal in early 1999 in which they cut output eventually leading to a recovery of global oil prices.

In September, Opec agreed to cut production from 24.5 million barrels per day to 23.6 million. Last month, Opec decided to remove 900,000 barrels a day from the ceiling to a total of 24.5 million barrels per day effective Nov. 1

Oil prices have risen around 13 percent since then, but Opec fears rising oil supply outside of the group and a return of Iraqi exports may hurt early oil prices early 2004.

Some Opec members say they won't reduce output if independents don't. The group is trying to convince major non-Opec producers like Mexico to cut production, possibly in January. Venezuela and Saudi Arabia are Opec members.

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