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24

OPEC appeals for price stability

OPEC ministers pressed non-member producers yesterday to help shore up oil prices which slumped sharply after this month's US terror attacks, delaying a formal accord to leave their output unchanged. The Organisation of Petroleum Exporting Countries was pressing non-member states such as Russia, Norway and Mexico for "immediate joint action" to stabilise markets, according to one delegate.

OPEC ministers pressed non-member producers yesterday to help shore up oil prices which slumped sharply after this month's US terror attacks, delaying a formal accord to leave their output unchanged.
The Organisation of Petroleum Exporting Countries was pressing non-member states such as Russia, Norway and Mexico for "immediate joint action" to stabilise markets, according to one delegate.
But in Oslo, Norway signalled it was not interested.
Saudi Arabian kingpin Ali al-Nuaimi reiterated that OPEC does not need to alter its current output quota. The organisation was expected to confirm its decision to maintain the status quo later yesterday.
But al-Nuaimi urged non-OPEC members to play their part. "We don't want to hand OPEC sole responsibility for defending prices because that lies with everyone," he told the daily Al-Hayat newspaper in Dubai.
"If they (non-OPEC members) cooperate, we will defend prices. If not, we will not be in a position to do it ourselves," he said.
The OPEC ministers agreed to maintain the status quo in informal talks yesterday clouded by the economic fallout from the September 11 attacks on the United States.
"No change," said a source close to the Arab-dominated cartel after a ministers' meeting broke up late yesterday.
The 11-member Arab-dominated cartel pressed their non-OPEC colleagues on their production quotas at an informal meeting late yesterday, which delayed a formal announcement of an OPEC decision on quotas.
"The main point of members was to press non-members to obey the general line in order to stabilise the oil market," according to a delegate from a major non-OPEC producer, requesting anonymity.
"A draft resolution was proposed with two key points: immediate joint action against the decline of the oil price and the setting up of a joint study group which will start working here in Vienna."
In a sign of possible tension between OPEC and non-OPEC members, Norway, the second-biggest oil exporter after Saudi Arabia, said yesterday it did not intend to reduce its production despite calls for it do so by OPEC members.
"A change in our policy is not envisaged. We are not even discussing it," a spokesman for the Norwegian oil and energy ministry Sissel Edvardsen told AFP. "We take our decisions in a unilateral way. We are not a member of OPEC."
Norway extracts about 3.2 million barrels of oil per day.
Crude prices have slumped a two-year low point this week, amid forecasts of slumping demand as world economies slow further in the wake of the September 11 terror attacks in the United States.
OPEC's own market gauge, its basket price, slipped below $US20 ($A40.87) a barrel for the first time since August 1999 on Tuesday, but rebounded yesterday to $US20.11 ($A41.10) dollars.
The decision by OPEC ministers, resisting the temptation to give prices a boost by slashing quotas, will likely be welcomed by Western states for whom low oil prices ease pressure on already weak economies.
Ministers were also exploring ways of sending a message to the market by reining in current overproduction, which some analysts believe could be about one million barrels a day above the current quota of 23.3 million barrels.
Analysts said that quota discipline was really the only option open to OPEC at present.
"The only thing they can do given the environment now after September 11 is to recommit themselves to quota discipline," said Mehdi Varzi, an oil expert with Dresdner Kleinwort Wasserstein.
The OPEC ministers agreed to meet for a final formal session 2.00pm (2200 AEST) yesterday.
The cartel's ministers also also due to meet again in November, earlier than its next scheduled meeting, as well as next March, to review their production.
AFP