World oil demand may fall sharply in the second quarter of 2005 and the Organization of Petroleum Exporting Countries (OPEC) may take action in anticipation of such a decline, OPEC President Purnomo Yusgiantoro said.
“There have been developments (that suggest) that during the second quarter of 2005, demand for oil will plunge,” Yusgiantoro said without elaborating.
“Therefore there’s a need to think about this and the steps to be taken,” he added.
He said OPEC will discuss its policy for 2005 at its upcoming meeting in Cairo on Dec 10.
The meeting will also discuss OPEC’s current price range for its benchmark basket of crude oils of USD22-28 per barrel, he said.
OPEC uses the band to determine whether it must reduce or add production in order to keep oil prices stable within that range.
It is considering revising the basket price range to reflect higher world crude oil prices.
In overnight trade at the New York Mercantile Exchange crude for January delivery rose 32 US cents to close at USD49.76 a barrel, its highest level since Nov 3.
Yusgiantoro said OPEC’s current oil output, excluding Iraq, stands at 1.5 mln barrels per day (bpd) above its quota of 27 m bpd.
“With Iraq, total production amounts to 30.5m barrels (per day),” he said.