OPEC oil price goes up ahead of expected production cut

December 16th, 2008 - 7:50 pm ICT by IANS  

Vienna, Dec 16 (DPA) The price of oil produced by the Organization of Petroleum Exporting Countries (OPEC) rose by $1.21 Monday, ahead of an expected decision Wednesday to cut output in order to raise oil prices and react to lower demand.One barrel (159 litres) of OPEC-produced crude stood at $42.53 Monday, the Vienna-based organization announced Tuesday.

OPEC President Chakib Khelil said Monday evening that all member states were in favour of lowering production at their meeting in Oran, Algeria Wednesday.

In the worst case, the 13-country organization expected oil demand to decrease by up to 500,000 barrels per day in 2009, Khelil said in Oran.

The cartel, which produces over 40 percent of oil worldwide, has seen its per-barrel basket price fall from an all-time high of $140.73 in July to $36.67 on Dec 5, pulled down by the financial crisis.

Analysts expect OPEC to slash actual production by 1.5 to 2 million barrels per day. Under OPEC’s cutback plan, Russia would also be asked to cut its output, according to Vagit Alekperov, the head of Russia’s largest private producer LUKoil.

Russia is not an OPEC member but is set to send a delegation to Oran as observer.

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