"We took this decision and it is a first signal. We're talking to non-OPEC countries and want to achieve a real commitment from them (if a production cut is needed when OPEC meets Dec. 4 in Vienna)," Rafael Ramirez told reports.
The group cut its output ceiling at its meeting Wednesday to head off a possible price drop after being presented with a bearish assessment of the market just hours before the decision was announced.
OPEC's decision remove 900,000 barrels a day from the market by cutting the ceiling to 24.5 million b/d was a surprise. The cut sent oil prices soaring. The decision reversed an increase agreed in April, when Iraq was struggling to return its oil output to prewar levels.
Ramirez cited Iraq's expected progress next year on raising its production, higher output from independent producers like Russia and an unusual increase in oil inventories this winter as factors that could lead to far lower prices by the first quarter of 2004. "We had to act, the tendency was that prices would fall. There were real worries, and we all agreed to act now," said Ramirez.
Ramirez said the group continues to defend its price band of $22-$28/bbl for its benchmark basket of crudes.
Also, at the OPEC meeting, Venezuela opted to strike a defiant pose over Iraq's presence. Venezuelan officials said the Iraqi government wasn't recognized by the U.N. and therefore had no right to vote formally on OPEC's decisions. However, after realizing it was alone on the issue, Venezuela drafted a letter of protest and accepted Iraq's presence at the meeting. "This was no defeat, we just acted on our principles," said Ramirez.
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