NIGERIA: OPEC agrees to hold production unchanged for now but set the stage for a cutback of half a million barrels a day in February

OPEC has agreed to delay an oil output cut of 500,000 barrels per day, or two percent, until February 1 when the northern winter is ending, the group said on Thursday (December 14), sending oil prices above 62 US dollars. By postponing a further reduction until peak demand has passed, OPEC is acknowledging importer nations' concern that a cut now will drive prices higher and hurt their economies. "The conference decided to reduce the current OPEC production by 500,000 barrel per day with effect from 1st February 2007 in order to balance the supply and demand," said OPEC spokesperson Omar Farouk Ibrahim at a news conference. OPEC also confirmed that Angola would become OPEC's 12th member in 2007, giving the cartel even more muscle. "In accordance with the provisions of article 7 of the OPEC statue the conference unanimously admitted Republic of Angola as the 12th member of the organization with the effect from 1st January 2007," Ibrahim said. The group that pumps over a third of the world's oil has already curbed output this year -- by 1.2 million bpd to 26.3 million in October to halt a 10-week, 25 percent price slump. As recently as last week there was little doubt a further cut of at least 500,000 barrels per day would follow from January 1. But with oil above 60 US dollars and consumer nations on edge the mood shifted in some delegations towards a slight delay. US oil was up 82 cents at 62.19 US dollars at 1342 GMT, having hit a session high of 62.72 US dollars on the news.

ITN Source | December 15, 2006

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