Associated Press
VIENNA, Austria — OPEC members have decided to continue pumping at current levels of production despite a dramatic drop in oil prices since the terror attacks on the United States.
Representatives of the Organization of Petroleum Exporting Countries announced their decision Thursday after a final round of talks at the cartel’s headquarters in Vienna, Austria.
Confronted by shrinking demand for oil and uncertainty over U.S.-led military action against terrorism, OPEC delegates plan to reconvene on Nov. 14 to review market conditions. They said they would cut output at that time if necessary.
OPEC’s official output target is 23.2 million barrels a day. The group supplies almost 40 percent of the world’s oil, including overproduction estimated at between 700,000 and 1.5 million barrels a day.
It has cut back its official production three times this year already, most recently by 1 million barrels a day on Sept. 1.
The delegates agreed Wednesday to stick with their current production quotas but postponed announcing their decision until Thursday because they needed to wrangle over the precise wording of their official communique. The one-day delay reflected the difficulty OPEC’s 11 member nations have had in reaching a consensus amid the intense economic and political unease prevailing since the Sept. 11 attacks on the United States.
"The deteriorating global economic outlook, exacerbated by the recent tragic events in the USA, is expected to have a dampening effect on world oil demand," OPEC said in its communique. In order to maintain stability in oil markets, the group decided not change its official output and to maintain discipline among its members.
OPEC did not rule out adjusting output before its November meeting if prices remained unacceptably low.
"We still have as a target to stabilize prices between $22 and $28 (a barrel)," OPEC president Chakib Khelil told a news conference. He said the group would use "any measures," including holding telephone conferences as it did when it cut output in July, to try to defend that target.
Under an existing arrangement, OPEC has said it will cut its daily production by 500,000 barrels if its benchmark price for crude falls below $22 a barrel for 10 consecutive trading days. The OPEC benchmark price stood at $20.11 on Wednesday, the most recent day for which the information was compiled. It was the third consecutive day on which the OPEC benchmark was below $22.
Several delegates said they believed the slide in prices would be temporary.
"Prices will in the coming weeks return, I am sure, to an acceptable level," OPEC Secretary-general Ali Rodriguez told reporters.
Still, Kuwaiti Oil Minister Adel al-Subeih said he would not be concerned if the price stayed at or even slightly below $22 a barrel. "We would be satisfied with that," he said.
Energy analyst Raad Alkadiri seemed to agree.
Prices ranging from $20 to $22 a barrel are "not a nightmare" for OPEC, said Alkadiri of The Petroleum Finance Co., a Washington, D.C., consultancy. "They can still balance their budgets. This is not asking OPEC to tighten their belts too much."
The meeting took place amid unusually tight security, in the wake of the attacks on New York and Washington. German shepherd police dogs had earlier prowled the building sniffing for bombs, and extra police armed with assault rifles patrolled inside and outside the building.
Khelil, speaking to delegates at the start of their meeting, extended OPEC’s condolences to the families of the victims of the attacks, before saying that the attacks would have a "profound" impact on global demand for oil.
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