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Opec debates oil production cuts Opec keeps oil output unchanged
(about 3 hours later)
Oil ministers from the 12 Opec countries are meeting in the Austrian capital Vienna to decide whether to cut oil production further. Oil ministers from the 12 Opec countries meeting in the Austrian capital Vienna have decided to keep oil production at current levels.
With global demand for oil predicted to fall this year, the ministers are keen to avoid another sharp decline in the price of oil. Some ministers had pressed for a cut in production, but others were believed to favour enforcing previous cuts before any new measures were considered.
With demand for oil predicted to fall this year, Opec is keen to avoid another decline in the price of oil.
Prices have averaged $40 a barrel in 2009 compared with $100 last year.Prices have averaged $40 a barrel in 2009 compared with $100 last year.
Some Opec members are believed to favour enforcing previous cuts before any new measures are considered.
However, others such as Algeria, Venezuela and Qatar, said that oil output should be cut further. OPEC MEMBERS Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatair, Saudi Arabia, UAE, Venezuela
"The market expects a cut of between 0.5 to 1.5 million barrels per day," said Algerian energy minister Chakib Khelil before the meeting started.
"How much we are going to cut is a decision we will make in the meeting."
Oil prices have fallen from a record high of more than $147 (£24) a barrel in July and currently trade around $46.
Analysts are warning, however, that further cuts in production could backfire, destabilising the fragile global economy and pushing down the price of crude even further.
According to Opec figures, the 12 member states have so far delivered only around 80% of the 4.2 million barrels per day in cuts that have been agreed since September last year.According to Opec figures, the 12 member states have so far delivered only around 80% of the 4.2 million barrels per day in cuts that have been agreed since September last year.
The presence of non-Opec member Russia could also influence the outcome of the meeting. OPEC MEMBERS Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatair, Saudi Arabia, UAE, Venezuela
Russia, which vies with Saudi Arabia as the world's largest oil producer, is sending Deputy Prime Minister Igor Sechin to Vienna to observe proceedings. The ministers pledged to comply more strictly with the cuts.
Russia said it planned to send a permanent observer to Opec. Another meeting will be held on 28 May to assess whether further cuts in production will be necessary.
Algeria, Venezuela and Qatar, had said that oil output should be cut further. Oil prices have fallen from a record high of more than $147 (£24) a barrel in July and currently trade around $46 as the global downturn has hit demand for oil and oil-based products.
Russia, which vies with Saudi Arabia as the world's largest oil producer, sent Deputy Prime Minister Igor Sechin to Vienna to observe proceedings and said in future it planned to send a permanent observer to Opec.
However, it said it was not inclined to join the organisation.