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Iran warns of 2 million bpd cut

Oct 23 2008 10:50

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Vienna - Iran's oil minister on Thursday said that a drop in demand meant Opec should decide to cut production by two million barrels per day when it meets for a meeting here on Friday.

"Two million will stabilise" the market, Gholam Hossein Nozari told reporters on arrival in the Austrian capital. On Tuesday he had said that Iran was looking for a cut of between two and 2.5 million barrels per day.

"The rate of reduction of demand is good for a cut," said Nozari.

Opec's member countries are calling for a cut to the cartel's output to help shore up oil prices, which have tumbled in recent weeks as a global economic slowdown slashes demand.

Analysts expect the cartel to decide on a reduction of at least one million barrels per day when it meets for an extraordinary meeting on Friday.

Opec produces 40% of the world's oil and its official output quota stands at 28.8 million barrels per day.

Iran is the second largest exporter in the Organisation of Petroleum Exporting Countries and its economy is heavily dependent on oil and gas income.

Opec kingpin Saudi Arabia is the world's biggest exporter of crude.

Oil futures on Wednesday tumbled to 16-month lows, mainly on news that demand for crude is slumping in the United States, the world's biggest energy consumer.

Prices slid under $65 a barrel in London, down about 56% from a record high of $147.5 reached in July.

They recovered slightly in Asian trading on Thursday, with Brent up 24c at $64.76 a barrel.

- AFP

 
 
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