London (Platts)--10Oct2008

British Prime Minister Gordon Brown Friday urged OPEC not to cut
production at its extraordinary meeting next month, saying it would be wrong
for the oil cartel to reduce output so as to keep prices high at a time when
the world economy was in turmoil.

He called for statesmanlike behavior from OPEC's leaders, saying they
should ensure that oil prices were reduced in a stable manner.

"I'm talking to the leaders of OPEC who really are responsible for
setting the oil price and telling them that they must not, as (some) of them
are planning to do, cut oil production now so that the price will go up
again," Brown was quoted by French news agency AFP as saying.

"They must act in a statesmanlike way to help the rest of the world by
making sure that we have a stable reduction in the oil price," he said.
Brown, who will host a meeting of oil producing and consuming countries
in London on December 19, was speaking a day after OPEC said it would meet on
November 18 in Vienna to discuss the global financial crisis and its impact on
world oil markets.

Having peaked at record highs above $147/barrel in July, world crude
benchmarks plunged below $80/b on October 10 to their lowest levels for a
year.

US light crude futures fell to an intra-day low of $78.61/b, while Brent
dropped back to $75/b, losing more than $72/b in just two months.

Qatari oil minister Abdullah al-Attiyah said in a television interview
broadcast Thursday that OPEC might consider cutting production to balance the
market amid falling demand for crude oil.

"In November, there will be a study of supply and demand. If we see that
supply is more than demand, OPEC will take measures to reduce supply further,"
Attiyah told Dubai-based al-Arabiya television.

At the November meeting, OPEC will discuss the market situation and
"formulate a plan to be implemented to restore balance between supply and
demand" in view of the current global financial crisis, Attiyah said, adding
that he believed the crisis had not been fully played out .

When news first emerged Wednesday that an extraordinary meeting was on
the cards, Libya's top oil official, Shokri Ghanem, said all options were
open to the group in its efforts to stem the steep price fall.

Iran's oil minister Gholamhossein Nozari said last weekend that world oil
markets were already oversupplied to the tune of 400,000 b/d and that this
volume could triple to 1.2 million b/d early next year. He said an oil price
below $100/b served neither producing nor consuming countries.

The International Energy Agency, meanwhile, slashed its estimates of
world oil demand for the remainder of this year and in 2009 as a result of the
ongoing financial crisis.

It sees OECD demand falling by more than 1 million b/d this year as
the biggest economies face a "severe economic slowdown or even a recession,"
though it said there was so far no clear sign that demand in China was slowing
down, while Middle East demand remained robust.

The IEA, which estimated OPEC's September production at 32.25 million b/d
sees demand for OPEC crude falling to 30.9 million b/d next year from 31.7
million b/d this year.
--Margaret McQuaile, margaret_mcquaile@platts.com