Al-Attiyah: OPEC output cuts could come early

Qatari Minister of Energy and Industry Abdullah Bin Hamad Al-Attiyah Thursday acknowledged that the Organization of Petroleum Exporting Countries had been caught unprepared by the sudden drop in oil prices and would now have to consider cutting production earlier than expected, according to a report from the organization's news agency, OPECNA.


DOHA�Qatari Minister of Energy and Industry Abdullah Bin Hamad Al-Attiyah Thursday acknowledged that the Organization of Petroleum Exporting Countries had been caught unprepared by the sudden drop in oil prices and would have to consider cutting production earlier than expected, according to a report from the organization's news agency, OPECNA.

However, he suggested any decision on production cuts could wait until the Jan. 17 OPEC meeting in Vienna, allowing time for the "dust to settle, and [for] speculators with long positions to have their holidays."

He said, "We were expecting prices to soften and stabilize at levels around the upper end of the OPEC target price range of $22-28/bbl. "It was not anticipated that the price decline would be so steep and would take place so early in the winter.

"We have noticed the improvements in availability of heating oil and other products. We also noticed the contra-seasonal moderate temperatures in the Northern Hemisphere," he added.

Al-Attiyah emphasized that he "did not think that there [was] a need for immediate action."

He suggested that the price drop had resulted from oversupply linked to a succession of production hikes, "mostly not called for by the supply-demand balance and forecasts," which had not been given enough time to take effect.

"The production increases [of OPEC and non-OPEC countries] came at such a pace that they did not allow enough time for full digestion of additional volumes before further volumes were made available," he said.

"We can consider these changes as an accumulated correction, which many consider long overdue," he added.

Al-Attiyah expressed concern as to the "magnitude" of the output hikes, as well as the "timing of the temporary suspension of oil supply from Iraq," which, he stated, "might make the need for a production cut to come earlier than expected."

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