Opec has not ruled out making a third production cut in three months when it meets this weekend in a bid to put a floor under collapsing world oil prices, Libya's lead Opec delegate said on Thursday. The Organisation of the Petroleum Exporting Countries is struggling to slice output fast enough to keep up with a recessionary reduction in fuel demand in the West that has pushed crude prices down by nearly two-thirds since July.
Benchmark US crude fell 88 cents to $53.56 a barrel on Thursday after dipping last week to near $48 a barrel, the lowest in three and a half years and almost $100 off its peak. Ahead of Saturday's meeting, several Opec delegates have said the 12-member group is likely to measure compliance with the two million barrels a day of cuts made since September and leave a decision on a further reduction until another meeting on December 17 in Algeria. But Shokri Ghanem, the head of Libya's National Oil Corp, said another immediate cut in Cairo could not be ruled out.
"We have first to look at the compliance and see if we have to do something. All options are there," Ghanem told Reuters from Libya. Opec's most hawkish members Iran and Venezuela have suggested an immediate reduction in output. Delegates among Opec's Gulf producers have said it might make more sense to give previous curbs another month to work through the supply chain.
US oil demand in September fell nearly 13 percent from last year to just under 18 million barrels per day (bpd), its lowest level in a decade, the US government's Energy Information Administration said on Wednesday. The year-on-year decline in demand has deepened from 8.4 percent in August when demand was running at 19.27 million bpd. Opec agreed last month to cut output by 1.5 million bpd from November 1 following a 500,000 bpd reduction in September, equal to a 7 percent cut in cartel supplies.
EXPORTS DOWN 315,000 BPD IN 4 WEEKS: Opec seaborne exports, excluding Ecuador and Angola, fell 315,000 barrels per day (bpd) in the four weeks to November 9, Lloyd's Marine Intelligence Unit (LMIU) said on Thursday, in more evidence of supply restraint. The London-based consultancy that tracks oil tanker shipments of 11 producers, including Iraq and Indonesia, said exports fell to 22.812 million bpd, down from 23.127 million bpd in the four weeks to October 12.
The estimate indicates the Organisation of the Petroleum Exporting Countries is acting on its pledge to remove about 2 million bpd from world markets. LMIU said supply from Gulf producers fell 153,000 million bpd to 17.585 million, down from 17.738 million in the same period.