Posted on 11/24/2001 1:25:02 PM PST by staytrue
OSLO, Norway -- Under pressure from OPEC, Norway will scale back its oil production by 100,000 to 200,000 barrels a day to help shore up plunging oil prices, as long as other oil producers do their share, the oil and energy minister said yesterday.
The reduction was to take effect Jan. 1 on the condition that members of the Organization of the Petroleum Producing Countries comply with their promises and nonmembers do their share, Minister Einar Steensnaes said after getting permission from parliament for the decision.
"It is very important that Russia follow up efficiently,'' Steensnaes told reporters, adding that he would be in contact with officials in that country by today.
He would not name a specific target for what Norway thinks the oil price should be, but said OPEC's price band target of $22 to $28 per barrel "is not sensible at the moment.''
The cut would be made from an estimated production of 3.2 million barrels a day from Norway's offshore oil fields next year, Steensnaes said.
OPEC has agreed to scale back output by 1.5 million barrels a day on Jan. 1 but only if non-OPEC members, like Mexico, Norway and Russia, follow suit.
The oil cartel has asked them to cut production by a combined 500,000 barrels a day, as oil prices dropped nearly 30 percent in the past two months amid a sharp downturn in the global economy and a slump in petroleum demand.
Although prices have risen in the past few days amid expectations of production cuts, they still are far below the minimum $22 per barrel that OPEC wants.
Even though it is not a member, Norway has often cooperated with OPEC's price and production goals.
Mexico has promised a cut of 100,000 barrels on the condition that OPEC comply with its promise Jan. 1, and Oman could help out with 25,000 barrels.
Russia, which recently passed Norway to become the world's second-largest oil exporter, so far has only committed itself to a symbolic cut of 30,000 barrels, a fraction of its production of 7 million barrels a day.
Although prosperous Norway is concerned about sinking oil prices, it doesn't count on profits from the oil sector to balance the budget. Most of the gains are hoarded in a $60 billion fund for future generations.
The higher oil prices of last year and earlier this year have been a big contributor to the recession we're in.
I was referring to Norway, who like most European countries, has a quasi-planned economy.
I suspect that there is more oil up there than even the most optimistic predictions allow for.
Just goes to show what REAL competition is all about...Russia is jumping up and down in the background screaming..."YOU WANT OIL!!! WE HAVE OIL!!!!" And at least they are SMART enough to sell it to their customers.
I say let OPEC blow it out their nose...let's encourage Venezuela, the North Sea, Russia and others...sell your oil ad let the law of supply and demand DICTATE oil and gas prices...not a bunch of rag heads in the Middle East.
Supply and demand will force drilling eventually in Alaska, Florida, East Coast and more off California...not the politians or OPEC...plain ol law of supply and demand.
BTW demand for gasoline is off...let's see if we have a bone chilling winter...that might get interesting.
OHHH remember all the oil in the world has to be sent here and refined....we STILL have refinery problems...that is the biggest problem...NOT the getting of oil.
Uhh like they all ARE SOCIALISTS!!!
Always being 5 years away from supplying any meaningful quantity of oil prevents us from exerting any leverage or better yet the correct leverage on our enemies/suppliers. If congress were to approve drilling in Anwar that in itself would affect the world market.
When a company, or in this case a country is about to lose the business selling the only significant product they have you would be amazed the amount of leverage can be exerted for all good purposes. Political and economic.
Let's face it we need to build some freakin refineries too!
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