Khelil estimates 1.4 million b/d output glut

The Organization of Petroleum Exporting Countries' output is exceeding global demand by 1.4 million b/d, Algeria's Energy and Mines Minister Chakib Khelil said Friday, according to a report from the organization's news agency, OPECNA. Khelil said OPEC ministers might consider lowering the organization's output ceiling when they meet in January to prevent this oversupply coupling with a seasonal decline in demand next spring to cause 'further price deterioration.'


The Organization of Petroleum Exporting Countries' output is exceeding global demand by 1.4 million b/d, Algeria's Energy and Mines Minister Chakib Khelil said Friday, according to a report from the organization's news agency, OPECNA.

Khelil said OPEC ministers might consider lowering the organization's output ceiling when they meet in January to prevent this oversupply coupling with a seasonal decline in demand next spring to cause "further price deterioration."

"If OPEC continues to produce at current levels, oil stocks will rise further, demand will decrease and prices will decline more and more," he said in an interview with the Algiers daily Le Quotidien d'Oran.

He blamed the current "deterioration" in oil prices on several factors, including the string of four increases in the organization's production levels this year, and the rebuilding of stocks in the US and Europe linked to these hikes.

Khelil said that if current production continued to outpace demand so greatly, and was combined with the seasonal drop in demand in the second quarter of 2001, oil prices would fall further.

He said ministers attending the next OPEC meeting in Vienna should "carefully appraise the situation and analyze figures on expected [second quarter 2001] demand in order to take the right measures, including an eventual reduction in the current output ceiling."

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