DOHA, 20 October 2006 — OPEC appeared ready yesterday to announce a one million barrel per day cut to the group’s oil production to help shore up flagging prices but remained divided on how the reduction would be executed. Arriving in Doha for OPEC’s extraordinary meeting, Saudi Oil Minister Ali Al-Naimi said the Organization of Petroleum Exporting Countries would cut one million barrels per day from its current production, which is below its official quota of 28 million barrels per day (bpd).

Despite insistence by oil kingpin Saudi Arabia that the cut would be from production, a move which is backed by Qatar, Iranian Oil Minister Kazem Vaziri-Hamaneh said he supported slashing output from members’ official quotas. Analysts say a cut to actual production would likely send oil prices higher, while a cut to the official quota could see them fall because OPEC lacks credibility by already producing under official targets.

Naimi, meanwhile, added that OPEC has not ruled out a further cut in production when the cartel gathers in the Nigerian capital Abuja for a scheduled meeting on Dec. 14. This, together with his insistence that OPEC would cut actual output, helped crude prices in New York to rebound briefly above $58 per barrel yesterday, traders said.

Earlier, Venezuelan Energy Minister Rafael Ramirez said he believed OPEC was in agreement to cut one million bpd, a day after Algerian Oil Minister Chakib Khelil said such a reduction was a “done deal.” The 11-member group produces about 35.0 percent of the world’s crude, while its official quota of 28 million bpd has stood since July 2005.

Kuwaiti Energy Minister Sheikh Ali Jarrah Al-Sabah acknowledged to his country’s official news agency KUNA that “small differences” existed between OPEC members over the issue of quotas and actual production.

Naimi told reporters yesterday: “We are going to cut as OPEC a million barrels a day from actual production effective Nov. 1.” Saudi Arabia was expected to slash its production by 300,000 bpd to about 8.8 million bpd, an oil source told AFP.

OPEC members, not including Iraq which is excluded from the quota system, are currently producing less crude than authorized, with real output estimated at between 27.5 and 27.8 million bpd.

The group had last week agreed in principle to a one million bpd cut as oil prices have fallen to below 58 dollars per barrel in recent days.