Price drop leads OPEC to meet

Cartel 'very likely' to vote for output cuts next month

Crude oil prices have plummeted 41 percent from their July trading record of $147.27 a barrel, and closed at a 50-week low yesterday. (Hasan Jamali/Associated Press)

LONDON - OPEC will hold a special meeting next month at which it's "very likely" to agree to cut oil production in order to curb price declines, the group's president, Chakib Khelil, said yesterday.

Oil prices have plummeted 41 percent from their July trading record of $147.27 a barrel as the worsening credit crunch threatens to restrain economic growth and curtail energy demand. The Organization of Petroleum Exporting Countries, which produce 40 percent of the world's crude, disclosed the Nov. 18 meeting in Vienna after crude oil for November delivery fell $2.36, or 2.7 percent, to settle at $86.59 a barrel on the New York Mercantile Exchange yesterday, the lowest settlement in 50 weeks.

"The Organization is concerned about the deteriorating economic conditions with contagion risks," OPEC's Vienna-based secretariat said in an e-mail. The gathering will "discuss the global financial crisis, the world economic situation, and the impacts on the oil market."

OPEC had been scheduled to next meet on Dec. 17 in Algeria, where Khelil is the oil minister. The group resolved at its last meeting last month to stick more closely to official quotas, implying a cut of about 500,000 barrels a day.

The official production quota for 11 of OPEC's members is 28.8 million barrels a day. Collectively, those members exceeded that target by 390,000 barrels a day in September, according to Bloomberg estimates. Those 11 nations do not include Iraq, which has no quota, and Indonesia, which is set to leave OPEC next year.

Saudi Arabia, the organization's biggest producer, has yet to comment on the summit.

"The Saudis don't want to meet at all," said Leo Drollas, deputy executive director at the Center for Global Energy Studies in London. "They weren't happy to meet in Vienna and didn't want to announce any output restrictions. But they have the others around their necks and have to go through the motions."