Opec's next meeting must confirm that members have made all the oil output reductions they promised before taking any more action on output levels to prop up sagging prices, Opec President Chakib Khelil said on Saturday. "We will discuss another cut, whatever happens, but will there be a consensus? I cannot tell you today," Khelil said at a seminar on oil, referring to cuts agreed at an Organisation of the Petroleum Exporting Countries (Opec) meeting in Vienna last month.
Oil fell below $60 a barrel for the first time since March 2007 on Thursday, depressed by dismal projections for the world economy next year, and Opec ministers are due to meet formally next on December 17 in Oran, Algeria. "There will be a consensus in Oran, and this consensus will depend on the application of the reduction," Khelil said.
"If everyone has applied (the cuts) and everything in terms of prices stays at the levels we have today, it's of course clear that we will probably go towards a decision to reduce," he said, adding that if the cuts had not all been implemented it would be difficult to decide further action.
Taking further action at a time when previous cuts had not all been implemented would send a bad signal to the markets, which reacted to "the reality on the ground" rather than mere words, he said. Khelil said he expected prices to rise shortly, adding: "If we apply the reductions totally the probability of another cut is weaker."
Arab members of the group could discuss market developments informally on November 29 in Cairo on the sidelines of a meeting of the Organization of the Arab Petroleum Exporting Countries, he said. Oil's steep slide from a peak of more than $147 a barrel in July has already spurred Opec to rein in supply by 1.5 million barrels per day (bpd) from November 1. Some members of Opec want to cut more.
Khelil said that in addition to the 1.5 million bpd Opec cut, Saudi Arabia, the world's biggest exporter, was expected by itself to cut another 300,000 bpd that he said it had added to its own supply in recent months. Evidence of a world-wide economic downturn has mounted. The International Monetary Fund has predicted 2009 global economic growth of 2.2 percent, down 0.8 percentage points from its October forecast.