By Peter Wilson
Caracas: Opec, which pumps about 40% of the world’s oil, needs to consider cutting output at its meeting next month to guard against a “collapse’’ in prices, Venezuela’s oil minister said.
Venezuelan Energy and Oil Minister Rafael Ramirez said at a press conference on Saturday that prices are in “descent,’’ and Opec members shouldn’t add any more barrels to the market at this time.
“At the meeting in June, we have to evaluate a possible cut in output,’’ Ramirez said. “We have to be careful’’ to “avoid a collapse in prices,’’ he said.
The Organisation of Petroleum Exporting Countries next meets on June 15 in Vienna. Venezuela is the group’s third-largest producer.
Venezuela, the world’s fifth-largest oil exporter, is trying to avert a decline in prices as the government boosts spending on social programmes. Ramirez’s remarks followed charges by former managers of Petroleos de Venezuela that output is now 2.58mn bpd, or about 600,000 barrels less than the government’s estimate of 3.3mn bpd.
Crude-oil futures in New York fell below $48 a barrel, a three-month low, after an Energy Department report showed that US oil inventories rose more than expected last week.
“We have to protect oil prices,’’ Ramirez said, who said they are being pressured downward by growing inventories and speculators. Venezuela boosted government spending by 38% in February as surging revenue from higher oil prices paid for bigger outlays for social programs. Spending last year jumped 61% from
2003. – Bloomberg |
