OPEC to hold emergency meeting

October 9, 2008 2:14:43 PM PDT
OPEC said Thursday it will hold an extraordinary meeting Nov. 18 to discuss how the widening global financial crisis is affecting oil prices, a move that could lead to a coordinated production cut in a bid to halt crude's steep losses. In a statement published on its Web site, the Organization of Petroleum Exporting Countries said it's concerned about how the crisis is hampering global economies and world oil markets. The meeting will be held in Vienna, Austria.

Oil prices have fallen about 40 percent since soaring to a record $147.27 on July 11 as a global financial downturn forces people and businesses everywhere to cut back on energy use.

Analysts have predicted OPEC might use the meeting to announce a production cut in a bid to keep prices from falling further.

OPEC hinted that such a decision may be coming, saying in the statement that it would work "to ensure that oil market fundamentals are kept in balance and market stability is maintained."

Light, sweet crude for November Delivery fell another $1.85 to $86.80 a barrel in afternoon trading on the New York Mercantile Exchange.

There is some doubt whether OPEC can actually slow oil's decline. The cartel's decision last month to cut production by 520,000 barrels a day failed to halt the losses, which have accelerated in recent days.

OPEC members in recent days have stepped up calls to tighten production.

On Thursday, the head of Libya's national oil company, Shukri Ghanem, called on oil producing nations Thursday to cut output to "protect their interest (and) stop the loss of income."

"However, OPEC's aim is to create a balanced market, which neither harms the producers nor the importers," Ghanem told The Associated Press.

The decline in crude prices has fanned fears among OPEC members, many of whose economies are heavily dependent on oil exports.

On Wednesday, Venezuelan President Hugo Chavez said some OPEC members wanted the extraordinary meeting to address oil's downward spiral.

OPEC previously had not planned to meet until Dec. 17 in Algeria.