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Likely OPEC cut lifts crude
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January 15, 2001: 2:39 p.m. ET
Oil rises in London despite efforts of U.S., Europe to minimize output curbs
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LONDON (CNNfn) - Crude oil prices nudged higher Monday despite U.S. and European efforts to limit OPEC output curbs expected later this week.
In London trading Monday, the Brent crude oil futures contract for March delivery rose 43 cents to close at $26.20 per barrel.
Ministers from members of the Organization of Petroleum Exporting Countries, the oil cartel responsible for about 40 percent of the world's crude supply, are set to meet at its headquarters in Vienna Wednesday.
OPEC President Chakib Khelil of Algeria said Monday his preference was for the group to cut production by between 1.5 to two million barrels per day, in line with the range expected by many industry observers.
Khelil said one OPEC country, which he did not identify, is calling for a reduction of more than 2 million barrels. Several in OPEC, such as Saudi Arabia, favor a reduction of 1.5 million barrels. A 1.5 million-barrel cut would be a decrease of just over 5 percent.
"OPEC has convinced itself of the need to cut its output target by at least 1.5 million [barrels per day]," said London-based Centre for Global Energy Studies (CGES) in a research note Monday.
"OPEC seems determined to keep oil prices high despite the growing danger of recession in the U.S."
U.S. Energy Secretary Bill Richardson on Monday finished his lobbying against cuts during a tour of Gulf states. Richardson said he had not received any commitment about the size of an expected oil production cut by OPEC. 
"Zero (output reduction) is what we have in mind," Richardson told a news conference in Kuwait at the end of talks in Saudi Arabia, Qatar, the United Arab Emirates and Kuwait. "But we are realistic ... I did not get any commitment. We ask for as small a cut as possible."
An OPEC spokesman told CNNfn.com a definitive decision will come only after ministers meet Wednesday. But it appeared Monday that heavy lobbying from Richardson had fallen on deaf ears.
European Union Energy Commissioner Loyola de Palacio said Friday the U.S. and EU were more comfortable with prices around $25 to $26 a barrel, adding that "$30 is not an acceptable price... nobody should be comfortable with that."
Last year, OPEC set a target range of $22 to $28 per barrel for its basket of crudes. The cartel was forced to increase output four times in 2000 in an attempt to hold back the runaway crude price.
At one stage Brent prices jumped to more than $34 a barrel amid high demand and low oil reserve levels in the United States, the world's biggest consumer of oil.
"OPEC's members seem to regard the $10 [per barrel] fall in oil prices as the beginning of a collapse that must be reversed, rather than a correction from an unsustainably high level," CGES said.
-- from staff and wire reports 
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