Expansionary Institute

Michael Zey
futurist3000@aol.com

By Rawhi Abeidoh

 
MANAMA, Dec 31 (Reuters) - Saudi Arabia and its partners in the six-member Gulf Cooperation Council (GCC) on Sunday called for oil output cuts at OPEC's next meeting on January 17 to shore up prices, a final communique from GCC leaders said.

The communique said the leaders, who ended a two-day summit in Bahrain, also asked their oil ministers to take any other steps necessary to achieve the cartel's targeted prices of $25 a barrel.

"The GCC Supreme Council instructed their oil ministers to work to reduce production levels at OPEC's next meeting and take any other measures to maintain equilibrium in the market and achieve the targeted price," said the communique read by GCC Secretary-General Jameel al-Hujailan.

Delegates said earlier that the leaders had held intensive talks about the current oil market during the summit and expressed concern about the recent slide in oil prices.

But the delegates, familiar with OPEC oil policies, said it was too early to talk about specific figures for the planned ouput curbs.

Oil prices have dropped some 30 percent below their mid-October peak and are currently in the lower range of OPEC's $22-28 a barrel price band, prompting calls by some cartel members for output curbs to avoid a sharp fall in prices at the end of the first quarter when peak winter demand dwindles.

Energy revenues are the backbone of the economies in the six Gulf Arab states.

GCC PLEDGE COMMITMENT TO STABLE PRICE

The communique said the leaders "reaffirmed their commitment to prices that are appropriate for producers and consumers and pledged to maintain the same policy next year to maintain a balanced market and stable prices within the range agreed by OPEC."

The GCC, an economic and political alliance set up in 1981, includes four OPEC members -- Saudi Arabia, Kuwait, the United Arab Emirates. The two other smaller producers Bahrain and Oman have generally supported the cartel's policies.

A draft economic agreement obtained by Reuters calls on GCC members to "adopt unified policies on oil and gas and adopt common positions towards the outside world and in international and specialised organisations."

It was not immediately clear if the agreement had been approved by the leaders. But it also urges the members to adopt policies that would achieve integration in "all areas of the oil and gas industries."

The six Gulf Arab states sit on more than half of the world's oil reserves and their policies are seen as crucial to global prices.

"The oil market situation has been on everyone's mind during the summit's deliberations," one delegate said.

They said Saudi Arabia's Oil Minister Ali al-Naimi and his Kuwaiti counterpart Sheikh Saud Nasser al-Sabah had attended the deliberations, but gave no further details of the talks.

The cartel, which controls two-thirds of global oil exports, jacked up production four times this year by a total 3.7 million barrels to cool sizzling oil prices.

But when it meets on January 17 in Vienna, the group looks more likely to cut back production.

OPEC member Indonesia said on Tuesday it would propose an output reduction of between one and 1.5 million bpd.

06:28 12-31-00

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