OPEC to make oil output cut -

OPEC will take one million barrels of oil a day off oversupplied world markets as soon as possible with its first output cut in more than two years, OPEC officials said on Thursday, sending oil prices back above $US60.
Leading oil exporter Saudi Arabia will shoulder the biggest part of the burden as OPEC moves to address a 23 per cent drop in prices since July 14 and fuel stocks at a 7-year high in top consumer the United States, a senior OPEC delegate told Reuters.
The organisation that pumps over a third of the world's oil will curb supplies by over three per cent, he said.
"The goal now is to cut actual oil production by 1 million barrels daily as soon as possible but the exact date is still being worked out," the delegate said.
The United States was dismayed by the news. Energy Secretary Sam Bodman said he would tell OPEC ministers the world still needed all the oil OPEC could pump heading into winter. He noted that at $US60 a barrel oil was still near record highs.
"We still need oil for sure. We still need all the oil we can get," Bodman told Reuters in a telephone interview.
Nine OPEC countries will take part in the supply curbs and will cut their "fair share" from overall OPEC production, the senior delegate said. OPEC pumped 29.47 million bpd in September, according to a Reuters survey.
Only Iraq, exempt from quotas, and Indonesia, a net importer, will not participate, he added. All of this could pave the way for a realignment of OPEC quotas, and tricky negotiations, at a meeting already scheduled for December.
OPEC President Edmund Daukoru said later on Thursday that some members wanted an emergency meeting before then, but he thought it would be worthwhile only if the group were ready to make a substantial cut from its ceiling of 28 million bpd.
"If we meet now, to have an impact on the market, ... it would have to be substantive," said Daukoru, who is also Nigeria's Minister of State for Petroleum.
He said a reduction of one million barrels per day would be in line with market fundamentals.
So far, six members - top exporter Saudi Arabia, Algeria, Venezuela, Nigeria, Libya and Kuwait - were making voluntary cuts, but he did not say by how much. Talks were continuing on how to stem what he called a free-fall in prices.
The senior OPEC delegate said Saudi Arabia will reduce its production by 300,000 bpd from September's 9.1 million bpd, the senior delegate said, taking the kingdom's production to its lowest since May 2004.
This will be OPEC's first output cut since April 2004.
The group last changed its ceiling in July 2005 with a 500,000 bpd increase in response to rising demand from the United States and China's fast-growing economy and a seemingly relentless rise in the price of oil.
But the situation has changed in recent months with a stumbling US economy and a rapid descent in the US oil price from its $US78.40 peak in mid-July.
OPEC delegates said the organisation's primary concern was the high level of global fuel stocks.
"OPEC is concerned about prices but the most important thing they are concentrating on are inventory levels," the delegate said.
Analysts have expected OPEC to cut output for some time, especially after Nigeria, which holds the OPEC presidency, and Venezuela said last week they were making unilateral reductions.
"The marketing departments of these countries are finding it difficult to move their oil. And high global inventories are of grave concern," said Gary Ross of New York's PIRA Energy.
"At the end of the day, OPEC members are trying to protect their revenue and, in turn, the oil price."