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LONDON - Opec's president is holding intensive phone consultations with fellow oil ministers on further action by the exporter group to stem a sharp price drop, Opec sources said today.
Mohammed al-Hamli, also UAE oil minister, has spoken to counterparts from several Gulf states, Nigeria and Venezuela, the sources said. It was unclear whether any course of action was decided to stem a price drop of nearly 12 per cent this year.
Oil prices have fallen below US$54 a barrel to the lowest since June 2005 in a selloff triggered by mild weather, blunting the impact of supply cuts agreed by the Organisation of the Petroleum Exporting Countries.
"Today there are intensive and wide consultations among Opec ministers through the Opec secretariat about recent developments in the market," one source said.
"More consultations will likely take place between members to formulate a position on the recent market developments."
Opec agreed last month to cut oil output by 500,000 barrels per day from Feb 1, adding to a 1.2 million bpd reduction from November. So far, members have implemented just over half of the first cut, according to Reuters estimates.
Due to shipping and oilfield logistics, it can take weeks to implement a supply reduction. Cuts agreed in December are already in train and will become evident to the market from February.
An Opec spokesman confirmed ministers were holding phone consultations over the price slide.
On Monday, Venezuelan Oil Minister Rafael Ramirez had called for an emergency Opec meeting before the group's scheduled March 15 session to discuss prices.
Oil has plunged well below an undeclared target of US$60 a barrel for US crude that analysts believe Opec to be defending. Top Opec producer Saudi Arabia is thought to want US crude between US$55-US$65.
Problems could arise for Saudi Arabia's economy if the retreat continues, Hamas Saud al-Sayyari, governor of the Saudi Arabian Monetary Agency, has said.
A senior Opec delegate said on Monday the group stood ready to act to stabilise oil markets and Saudi Arabia was among Opec members "open to all possibilities."
UAE Oil Minister Hamli took over as Opec president this month after Nigeria's Edmund Daukoru finished his one-year term in December.
Some ministers and officials have said the group, which pumps a third of the world's oil, should wait to assess the impact of the Feb. 1 cut before deciding any further steps.
"I don't think we are taking any action immediately on this matter unless the price continues to go down," an Opec source said. "It's more likely we will wait to see how the market reacts to the Feb 1 cut."
Daukoru on Friday urged caution on reacting to the price drop, saying Opec should wait to see the impact of the supply curbs already agreed before making any further reduction.
- REUTERS
