OPEC Will ‘Definitely’ Cut Output Dec. 17, Qatar Says

Dec. 3 (Bloomberg) -- OPEC, supplier of more than 40 percent of the world’s oil, will “definitely” cut output at its next meeting in Algeria on Dec. 17 after postponing a decision last month, Qatar’s oil minister said.

Abdullah bin Hamad al-Attiyah said he doesn’t know by how much the Organization of Petroleum Exporting Countries will reduce output. The group wants crude oil prices at between $70 and $80 a barrel “because this is the range at which you can invest,” al-Attiyah said at a conference in Dubai today. “$70 is the minimum price at which we can invest.”

Ministers from OPEC postponed debate on a second cut in output in as many months during meetings in Cairo on Nov. 29. OPEC members said they would wait to gauge the effect of a 1.5 million-barrel cut agreed to on Oct. 24.

OPEC is likely to lower output as it seeks oil at $75 a barrel, Secretary General Abdalla el-Badri said Dec. 1.

OPEC members aren’t yet complying with existing cutbacks that started a month ago, according to PetroLogistics Ltd. The Geneva-based tanker-tracking consultant estimates that the 11 OPEC states subject to output quotas produced 27.8 million barrels a day in November, which is 500,000 barrels a day in excess of their official limit of 27.3 million barrels a day.

Crude oil rebounded from a three-year low today on speculation OPEC will cut production further this month to check the collapse in prices.

Crude rises

Oil for January delivery rose as much as $1.14, or 2.4 percent, to $48.10 a barrel in after-hours electronic trading on the New York Mercantile Exchange.

Yesterday, futures fell 4.7 percent to $46.96 a barrel, the lowest settlement since May 20, 2005. Oil has tumbled 67 percent from a record $147.27 a barrel hit on July 11 and is set to decline 50 percent this year, snapping six years of gains.

OPEC President Chakib Khelil said the group will need six months to remove excess crude oil from the market and push prices up, the Algerian newspaper El Moudjahid reported today.

Oil industry inventories should ideally be equal to about 52 days worth of demand, Saudi Arabia Oil Minister Ali al-Naimi said on Nov. 29 in Cairo. Stockpiles exceeded that level in the third quarter, reaching about 55 days of forward demand, according to the International Energy Agency.

Oil ministers including al-Attiyah are concerned that demand may weaken further, perhaps at a faster rate than they can curb supply, as a slowing global economy cuts consumption.

“The main determinant will be how the global economy performs,” Fatih Birol, the IEA’s chief economist said in an interview in Warsaw last week. “If the economy continues to slow down, this will put downward pressure on demand and also have an impact on prices.”