ALGIERS, Algeria — Oil markets should brace for a surprise decision on output cuts when OPEC meets Dec. 17, the cartel’s president said Saturday, suggesting that reductions could be deeper than expected.
“A consensus has formed for a significant reduction of production levels” by the 14-member Organization of Petroleum Exporting Countries, OPEC president Chakib Khelil told The Associated Press.
The OPEC head would not discuss how deep the output cut would be but said it could be “severe.” He noted that some analysts are predicting cuts of as much as 2 million barrels a day. An output decision that startles markets would help bolster plunging oil rates, Khelil said.
“The best way is to surprise them,” he said. “I hope it (the decision) will.”
Oil prices settled at a four-year low Friday of $40.81 a barrel. In July, prices peaked at record highs above $140 a barrel.
OPEC announced a 1.5-million-barrel-a-day reduction in October, but the decision failed to halt the fall in prices.
Markets have been expecting another cut at the Dec. 17 summit.
Khelil urged oil producers outside OPEC to help the cartel regulate prices, especially Russia, which has said it could sign a cooperation memorandum with the cartel in the Algerian city of Oran.
He acknowledged the cartel has little control over prices at the moment because of the slumping world economy, which has considerably reduced demand for oil.He pointed out that cartel nations produce only 40 percent of the world’s oil.
