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Venezuela, Russia say oil prices must stabilize
CARACAS, Venezuela — Venezuela will back repeated cuts in OPEC oil production until prices stabilize, Oil Minister Rafael Ramirez says, and Russia is proposing closer cooperation with the oil cartel.
Ramirez said Wednesday that his country will back a proposed 1 million barrel per day cut when OPEC meets Saturday in Cairo. If that doesn't halt the price slide, "We will keep cutting until the market stabilizes," he said during a visit by Russian President Dmitry Medvedev.
Oil prices fell below $54 a barrel Thursday as dismal U.S. economic data and rising crude inventories outweighed the possibility of production cuts by OPEC and non-member Russia.
Russian news agencies said that Deputy Prime Minister Igor Sechin, also in Caracas, revealed that Russia is seeking closer cooperation with the Organization of Petroleum Exporting Countries and that it has offered a draft agreement it hopes will be examined at an OPEC meeting next month in Algeria.
The document proposes cooperation in areas such as market studies and information exchanges, ITAR-Tass quoted Sechin as saying. But he would not say if calls for cooperation on pricing or production volumes.
Russia, the largest oil producer outside OPEC, produces around 11 percent of the world's oil and it could be eager to seek new customers to shore up its suffering economy. OPEC output is estimated at about 31.5 million barrels a day — about 40 percent of daily world demand.
Venezuela's President Hugo Chavez has said OPEC should work to keep global oil prices in a "band between $80 and $100."
Medvedev, whose nation is also a major oil producer, did not respond directly when asked if he would support that price band, but said Russia wants "fair and stable" oil prices.
"These don't need to be really low or really high" he said through an interpreter.
Russian state-run news agency RIA-Novosti quoted Medvedev as saying Chavez's suggestion of an oil-price band from $80-$100 was "not a bad corridor."
Venezuela is a founding member of OPEC, which cut production by 1.5 million barrels per day last month in an attempt to boost prices.
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