KUWAIT, 26 October 2003 — The OPEC oil group still plans to implement its September agreement to cut crude oil production by 900,000 barrels per day as of Nov. 1, Kuwaiti Energy Minister Sheikh Ahmad Al-Fahd Al-Sabah said yesterday.
Asked if the cuts would go ahead, he told reporters at Kuwait airport: “Yes, the Ist of November. The cuts of 900,000 barrels Ist of November will start.” The minister was speaking on his return from talks in Saudi Arabia with his Saudi counterpart Ali Al-Naimi on several oil issues.
“The price is over the OPEC basket (but) not with a very high margin. We will continue to follow the prices and we will wait for the 4th of December meeting to see what the prices will be at that time,” he added.
Although the Oragnization of Petroleum Exporting Countries agreed to slash its output as of Nov. 1 to 24.5 million bpd to shore up prices, it has said its rules stipulate it could consider hiking output should prices for an index of its crudes remain above $28 for 20 consecutive working days.
OPEC’s reference crude price stood at $28.10 a barrel on Thursday, the 11th day in succession above the $22-28 target range, according to the OPEC news agency.
Recently, the Kuwaiti minister and oil ministers from OPEC nations Qatar and Indonesia have all said OPEC could act quickly to pump more petroleum if prices do not dip below $28 a barrel.
But oil traders were confused after OPEC Secretary-General Alvaro Silva on Tuesday poured cold water on the prospect that producers could lift output soon to cool sizzling prices. Any new policy decision would wait until the scheduled December meeting, Silva had said.
The Kuwaiti minister said yesterday the Saudi and Kuwaiti authorities were watching the oil price carefully. “Both sides are following the prices.... although it’s a little higher but it’s still in the average of the OPEC basket,” he added.
Questioned whether he still supported the OPEC price band, Sheikh Ahmad said: “I still support the $22 to $28 price band”. He was reiterating his position to a recent proposal from Venezuela’s President Hugo Chavez that OPEC should increase the price band by $3 to $4.
Sheikh Ahmad also told reporters that Kuwait’s talks with Iran over the supply of gas from the giant offshore South Pars field were at an advanced stage.
“I think we are in an advanced stage in our discussions with Iran for the supply of the gas,” the minister said.
“And now after the delegate from Iran was in Kuwait last month, now a delegate from Kuwait will be in November in Iran to continue our discussions,” the minister added.
Kuwait and Iran have been talking for several years about the supply of gas from South Pars field to the Gulf Arab state.
