OPEC is seeking to decision shock the market to restore the balance

OPEC warned that it had made a significant reduction in production at a meeting in Algeria this month after oil prices tumbled to their lowest level in four years because of the global financial crisis.

OPEC President Chakib Khelil said there was unanimity among the Member for a substantial reduction from current production levels. He believed that the decision to have an impact shock in the market will help to strengthen prices.

 
He called producing countries from outside the organization, especially Russia, to cut production to restore the balance of prices.

 
Moscow had announced that it had signed a memorandum of cooperation with OPEC’s next meeting in Oran, Algeria.

 
Khalil acknowledged that OPEC does not have a significant impact on oil prices because of lower world economic growth, which consequently led to a decline in demand.

 
“The developed countries can not control the economic crisis and OPEC therefore can not predict the impact of the crisis on the demand for oil.”

 
The price of U.S. light oil to 40.81 dollars a barrel on Friday after arriving in mid-July last to 147.27 dollars, which is the highest ever.

 
Prices continued to fall
OPEC decided in October / November last cut production by 1.5 million barrels a day, but has been unable to stem declining prices.
The ministers postponed a meeting in Cairo on Saturday to take a decision on a new cut production amid signs that Saudi Arabia and other Arab Gulf countries to tighten commitments with the demands pre-production.
The delegates at the Cairo meeting that Iran and Venezuela, which call for bigger cuts to OPEC production are a source of concern regarding the production quotas commitment.
But Mohammad Ali Khatibi Iran’s representative to OPEC said on Thursday that his country pumps about 3.8 million barrels per day and is fully committed to its share of OPEC production cuts.
Iranian Oil Minister Gholam Hossein Nodhiri said last Sunday that the market is a surplus in the supply of oil is about two million barrels per day, but OPEC will have to decide in the Algiers meeting how to achieve price stability.