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OPEC Ministers Urged to Curb Oil Production - 2004-02-09


Ministers from the Organization of Petroleum Exporting Countries (OPEC), who are gathering in Algiers, are being urged to curb oil production in order to maintain prices.

OPEC members will meet Tuesday to decide if they should cut production in order to maintain stable prices when demand for oil declines during the typically warmer months of April, May and June.

OPEC President Purnomo Yusgiantoro says the group must take steps to restrain overproduction, or face a potentially significant drop in oil prices in the next few months.

Analysts calculate OPEC countries are producing 1.5 million barrels per day over their official quota of 24.5 million barrels per day.

Oil prices have stayed high, due in part to an especially cold winter in the United States and larger-than-expected oil demand from China. The normal price range is from $22 to $28 per barrel. In recent months, oil has been trading on the higher end of that range.

In advance of the meeting, several OPEC members expressed a desire to maintain overall output at its current level.

Many analysts believe that OPEC is not likely to officially reduce its quota, but that discussions may encourage members to trim production in order to stay within the output ceiling.

Iraq is the only one of the 11 OPEC nations that is not subject to the quota system. Iraq's oil output has declined significantly since last year's U.S.-led invasion, and leading OPEC countries boosted their output to make up the difference.

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