The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s oil, is ready to make a big” cut in supplies when it meets tomorrow, Venezuelan Oil Minister Rafael Ramirez said today. Crude has tumbled 70 percent from a record $147.27 a barrel on July 11 as the deepening global recession cuts demand for fuel.
Crude oil for January delivery rose as much as 96 cents, or 2.2 percent, to $45.47 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $44.97 at 10:30 a.m. London time.
OPEC members and other producers such as Russia are under increasing pressure to reduce supplies as oil’s $100 a barrel collapse cuts export revenue, creating budget shortfalls. World oil demand will fall this year for the first time since 1983 as the recession cuts fuel consumption, the International Energy Agency said last week.
OPEC is asking Russia, the largest oil exporter outside the group, to cut oil output by between 200,000 and 300,000 barrels a day to help revive prices, OAO Lukoil Chief Executive Officer Vagit Alekperov said in Moscow yesterday.
The price slump spurred OPEC to cut output by 1.5 million barrels a day in October, the first reduction in two years. The group, which deferred a decision on further cuts at its Nov. 29 consultative meeting in Cairo, will probably lower output targets tomorrow by at least 2 million barrels a day, or 7.3 percent, according to 18 of 33 analysts surveyed by Bloomberg this week.
Brent oil for January settlement rose as much as $1.16, or 2.6 percent, to $45.76 a barrel on London’s ICE Futures Europe exchange. The contract expires today. The more actively traded February futures gained 1 percent to traded at $47.60 a barrel at 10:31 a.m. London time.