Too early to say if OPEC will cut output at Jan meet: Gulf source

Dubai (Platts)--4Jan2006

It is too early to say whether OPEC will cut production when its oil
ministers meet in Vienna Jan 31 as the gas row between Russia and the Ukraine
as well as a recent fall in Nigerian crude output has made it difficult to say
what action the producer group would take, a Gulf source said Wednesday.
     "It is still too early to say. But you have to consider the problem with
Russian gas and so many other issues like the cuts from Nigeria so to it's too
difficult to say now what the decision will be," said the source.
     He was referring to the implications of the gas row between Russia and
the Ukraine and its implications for security of supply in Europe as well as
the loss in December of some 180,000 b/d of Bonny Light production from
Nigeria after an accident involving a Shell pipeline. All but 15,000 b/d of
production has now been restored.
     The source said markets did not appear yet to be thinking of the second
quarter of the year but the picture might become clearer after Jan 20, when
the extent of winter stock drawdowns would be known.
     "That is where direction will come and you may draw conclusions after
that," the source said.
     OPEC ministers last met in Kuwait City Dec 12 and agreed to maintain the
group's formal ceiling at 28-mil b/d and review the situation in Vienna. Some
leading members, including Iran, the second-biggest OPEC producer after Saudi
Arabia, have said they would favor a cut of 1-mil b/d in the second quarter. 
     Saudi Arabian production was unchanged in December at 9.5-mil b/d, the
source said.
--Kate Dourian, kate_dourian@platts.com

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