CGES Says OPEC Output Cuts Will Hardly Up Oil

Crude oil prices have slumped dramatically since hitting record highs above 147 dollars per barrel in July, as a spreading global economic slowdown has slashed demand for energy.

"OPEC would like to cut production further to boost prices, but several members have yet to implement the agreed cuts," the Centre for Global Energy Studies (CGES) said in its latest monthly report published on Monday.

"The weak state of the global economy will make it extremely difficult for OPEC to sustain higher prices."

The Organization of Petroleum Exporting Countries (OPEC) pumps 40 percent of the world's oil. Late last year, it cut output by a total 4.2 million barrels per day in a bid to reverse tumbling prices and protect its revenues.

Powerful OPEC kingpin Saudi Arabia has stated several times that it regards 75 dollars as a "fair price" for crude.

"The CGES believes that it will be almost impossible for OPEC to bring oil prices anywhere near to its desired level of 75 dollars per barrel in the current global economic climate," added the influential research group.

"The best it can do is to cut production in line with demand to prevent further falls in the oil price until the economy begins to recover."

Source: Petroleumworld

Author: Ksenia Kochneva