Opec likely to trim oil supply

Slower demand, an economic downturn and cheaper oil could convince the Organisation of the Petroleum Exporting Countries (Opec) it needs to trim supply unofficially, but the producer group is expected to leave public output targets unchanged when it meets next week.

Slower demand, an economic downturn and cheaper oil could convince the Organisation of the Petroleum Exporting Countries (Opec) it needs to trim supply unofficially, but the producer group is expected to leave public output targets unchanged when it meets next week.

Prices have plunged from a peak of more than $147 a barrel in July after leading oil exporter Saudi Arabia took a unilateral decision to pump at the fastest rate since 1981.

At the same time, demand in top oil consumer the United States fell at the fastest rate since 1982 in the first half of this year and traditional price hawks Iran and Venezuela have raised the prospect of reining in over-supply.

Given the potential for oil stocks to build, Opec would need to cut output at some point this year to prevent a further price fall, said David Kirsch of Washington-based consultancy PFC Energy.

"The question is not whether to cut, but when," said Kirsch.

The clamour for more oil from consumers has abated as the price has fallen, but record fuel costs triggered protests worldwide earlier this year and oil has been one of the top issues in the US election campaign. - Reuters

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