OPEC will cut production by a good amount.
OPEC will cut production by a "good amount" when it meets in December to tackle tumbling oil prices, the cartel's secretary general Abdalla Salem El-Badri said on Monday. "We can't say how much the output cut will be in December but for sure there will be an action because we're seeing that stocks are high," he told in Tehran. "I cannot tell you (the size of the cut) but it will be a good amount."
OPEC, which pumps 40 percent of the world's crude, met in Cairo on Saturday to assess the state of the oil market, but held off from making any decision on cutting production.
Instead, energy ministers from the Organisation of Petroleum Exporting Countries decided that any output move will be made when they next meet in Oran, Algeria on December 17.
"The price of 75 USD is reasonable but our outlook is for between 70 to 90 USD per barrel," El-Badri said in the Iranian capital, where he is attending an oil and gas seminar.
OPEC has already slashed output twice this year by a total of two million barrels per day (bpd) in response to plunging prices but fears remain that a global recession could ravage demand for energy.
And the production cuts, agreed in September and October, failed to stop prices sliding under 50 dollars a barrel earlier this month as concern mounted about a global recession that has already infected the eurozone and Japan.
OPEC's hands are tied
Prices are now down by more than 60 percent from record peaks of above 147 dollars seen in July but analysts have said OPEC's hands were tied because cutting output could damage the world economy even more.
In Asian trade on Monday, New York's main contract, light sweet crude for January delivery, sank 88 cents to 53.55 dollars, while Brent North Sea crude for January delivery eased 1.27 dollars to 52.22 dollars.
"Ministers agreed to take any additional action on December 17th to balance oil supply and demand and achieve market stability," OPEC president Chakib Khelil, who is also Algeria's energy minister, said in Cairo after Saturday's meeting.
"We took note of the serious deterioration in the world economy and its serious consequence on the oil price," he said.
The market is oversupplied
El-Badri also predicted in Cairo that prices will not begin to rise before the second half of 2009 and said that the market was oversupplied.
King Abdullah of OPEC powerhouse Saudi Arabia, the world's largest oil exporter, said in an interview published on Saturday that oil prices of 75 dollars a barrel would be "fair".
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