OPEC should cut output effective end-January: Algeria's Khelil

Washington (Platts)--30Nov2006

Algerian Oil Minister Chakib Khelil Thursday said he believes OPEC should
agree to cut production at its December 14 meeting, with the reduction
effective end-January.

Khelil said if OPEC cuts production at its upcoming meeting, to be held
in Abuja, Nigeria, it would not take effect until 40 days later.

The production cut is necessary to offset an estimated 2 million b/d drop
in second quarter world oil demand, Khelil told reporters after a presentation
to the African Oil and Gas Forum near Washington.

Khelil said he did not have a specific reduction in mind, nor did he have
a price target that would be acceptable to OPEC members.

Khelil said he was concerned OPEC would not be able to stop a drop in the
price of crude once it had started. He said this fear prompted OPEC to cut
output by 1.2 million b/d at its last meeting, held October 19 in Doha, Qatar.

If OPEC failed to act at its upcoming meeting, the group's president has
the capacity to call an emergency meeting ahead of its regularly scheduled
February meeting.

Khelil also said he hopes to meet with US Energy Secretary Samuel Bodman
this week.

--Cathy Landry, cathy_landry@platts.com

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