LONDON (Dow Jones Newswires), Dec. 19, 2008
The Organization of Petroleum Exporting Countries' president vowed Friday to cut production to boost sagging prices, setting it on a possible collision course with consumer countries relieved at crude's slump from record highs.
Chakib Khelil indicated the group's desire to protect prices by continuing to cut output until they even out, two days after OPEC agreed to cut output by 2.2 million barrels a day.
"We will continue this reduction until the price will stabilize," Khelil told reporters on the sidelines of a meeting of 27 oil producing and consuming nations in London.
OPEC Secretary General Abdalla Salem el-Badri urged caution over calls for lower prices.
"Low crude prices do not translate into equal lower prices at the pump. The price that the end consumer pays comprises significant amount of taxation. This is especially the case in Europe and Japan," he said.
Business leaders from oil companies like Total SA, Exxon Mobil Corp., Royal Dutch Shell, BP PLC and Chevron Corp. are also attending.
U.K. Energy Minister Ed Miliband said the meeting was aiming to reach agreement on goals like less volatility, regulation and greater transparency but he and advisors stressed this was likely to be a "process" rather than yielding immediate results.
Miliband declined to comment in detail on OPEC production cuts, but said: "I think lower prices are necessary for the world economy."
U.K. Prime Minister Gordon Brown originally envisaged a conference of heads of state and government, but those plans were scrapped over whether to invite leaders of OPEC countries such as Iranian President Mahmoud Ahmadinejad and Venezuela's Hugo Chavez, who are shunned by London.
The U.K. eventually decided to hold the conference but to downgrade it to ministerial level.
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