February 12, 2009 / 1:14 PM / 10 years ago

UPDATE 2-OPEC oil output cut option for March meeting-Libya

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By Alex Lawler

LONDON, Feb 12 (Reuters) - OPEC has all options open for its March 15 meeting in Vienna to set oil output policy, including a further cut in production, Libya’s top oil official said on Thursday.

The comments add to indications that the Organization of the Petroleum Exporting Countries may lower oil output for a fourth time since September to prop up prices which have collapsed by more than $100 a barrel.

“We will look at the market in more detail in March,” Shokri Ghanem, chairman of Libya’s National Oil Corporation, told Reuters by telephone. “All options are open, including a cut.”

Oil CLc1 has fallen below $35 a barrel from a record near $150 in July as a deepening recession erodes demand. In response, OPEC has reduced output by 4.2 million barrels per day (bpd) since September.

Other OPEC members, including Iran and Venezuela, and its secretary general and president have earlier raised the prospect of OPEC, the source of about a third of the world’s oil, lowering output further.

OPEC’s existing supply curbs have stopped the decline in the oil price, Ghanem said. He also urged OPEC members to meet their agreed revised production levels in full.

According to a Reuters survey, OPEC has delivered on 67 percent of the cutback it pledged to make in January. OPEC says compliance is higher at around 80 percent.

The weakness of the U.S. crude benchmark CLc1, known as WTI, against European marker Brent crude LCOc1 was proving a drag on a recovery in prices, the Libyan official added.

Brent is trading at a premium of almost $10 a barrel to U.S. crude as high inventories in the United States weigh on the American benchmark. Traditionally, Brent trades at a discount to WTI.

“We are poised for an improvement, but the situation of WTI is not helping,” said Ghanem. “The American market is full of oil.” (Reporting by Alex Lawler; Editing by William Hardy and Guy Dresser)

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