WRAPUP2-Saudi wants OPEC to comply, not cut more-report
* Saudi Arabia wants stricter OPEC compliance first
* Some other members of the group ready for another cut
* Demand falling fast
(Adds background on demand, paras 18-19)
RIYADH, March 9 (Reuters) - Top exporter Saudi Arabia wants OPEC to discuss stricter compliance with existing supply curbs before considering more cuts, a Saudi-owned newspaper reported on Monday.
Some members of the group, alarmed by falling demand, have made the case for more aggressive action.
Since September, the Organization of the Petroleum Exporting Countries has agreed to cut 4.2 million barrels per day -- about five percent of global daily supply.
So far, they have had only a limited impact on a price slide that has knocked more than $100 off the market since last July's record of nearly $150 a barrel for U.S. crude CLc1.
"There is no need to speak of a new production cut as it would be enough to enhance compliance with the previous decisions," al-Hayat reported, citing unnamed sources.
"Saudi has informed the presidency of the organization, which is Angola, that there must be... serious compliance with the latest reduction decision taken in December which has prevented oil prices from falling further," al-Hayat reported, citing a senior source.
Last week, a source told Reuters OPEC's president would propose no change at the March 15 meeting, although there was no official comment and the Angolan Oil Minister Jose Botelho de Vasconcelos said no decision had yet been taken.
The Angolan presidency has a mediating role, while Saudi Arabia as the biggest OPEC producer is the most influential of the group's 12 members.
Compliance with existing curbs is very high at more than 80 percent, according to independent observers, but that still leaves room for more discipline [O/OPEC].
"If we have about 80 percent (compliance), then we still need about 800,000 bpd to cut," OPEC Secretary-General Abdullah al-Badri said on Monday.
VENEZUELA, IRAN NOT COMPLYING?
Those who have failed to comply include Iran and Venezuela, al-Hayat reported, adding the two countries were typically among the most outspoken advocates of supply cuts.
This time around, Venezuela has said inventories were high and it would agree to another output reduction.
Iran has said it did not see a need to reduce production for now, but it has called for "a mechanism to repair prices" and for collaboration from non-OPEC producers.
The Iranian Oil Minister Gholamhossein Nozari did not specify what he meant by a "mechanism".
Previous efforts to involve non-OPEC producers, including Russia, Norway and Mexico, have had little impact and attempts to establish a price target have also failed to convince the oil market.
The curbs implemented since last September have been the most rapid and deepest yet.
At the same time demand has fallen more drastically than in 1998 when the oil price fell to around $10 a barrel. Then demand was around flat. This time, demand has contracted in response to the deepest economic downturn in decades.
Speaking on the sidelines of a conference in Doha, Badri said on Monday OPEC would revise downwards further its forecast for 2009 oil demand in its monthly report to be published on Friday.
The group's last report in February predicted global demand would fall by 580,000 bpd and the March report on Friday would forecast a fall in consumption of one million bpd, Badri said.
Asked whether OPEC needed to cut again to balance the market, Badri said "all options are on the table".
"The price is not really acceptable to us," he said. "But given the economic crisis it is okay."
(Reporting by Luke Pachymuthu and Simon Webb; writing by Barbara Lewis)
- Tweet this
- Share this
- Digg this