OPEC+headquarters+ViennaThe Organisation of Petroleum Exporting Countries(OPEC) may cut oil production by half a million barrels a day when its meets in December, the International Energy Agency(EIA) has said.

The body said if all go accoridng to plans, the reduction in production would be the first in five years since the last time such exercise was carried out was 2008.

It said: “ The last time OPEC cut its oil output was in late 2008 when it reduced production to 4.2 million barrels a day. During this time, oil demand fell and prices crashed amid the financial crisis.

Lately, Gulf countries, including Saudi Arabia, have supported keeping the production ceiling at 30 million barrels a day, The organisation could reduce production by half a million barrels a day due to the surge in the North American shale boom,”

OPEC’s latest report, released last week, projected that demand for its crude will slide 500,000 barrels a day next year to 29.4 million barrels of oilper day (MMbpd), or about 2.6 per cent less than the organisation is currently producing,’

It added that OPEC is ‘concerned’ about US/Canadian production increases and its implications on the global oil market.

The International Energy Agency also stated that demand for OPEC oil in 2014 will fail to meet its current production of around 30 million barrels per day, in its released report last week.

It said OPEC will try to maintain production levels in order keep prices from falling below $100 a barrel.

According to the body, the development coincides with a surge in oil supply from countries outside the OPEC group.


Information from The Nation was used in this report.