OPEC has new head as nations cut output

By Alexander Kwiatkowski  |   2009-1-3  |     NEWSPAPER EDITION

ANGOLA, OPEC's newest member, took over the group's presidency on Thursday as producers implement a record output cut to reverse last year's slump in prices.

The rotating leadership of the Organization of Petroleum Exporting Countries passed to Angola from Algeria as the 12-member group starts a 9-percent reduction in its total output target agreed in December after prices crashed US$100 in five months.

The country's new quota is 1.517 million barrels a day, 19 percent below its November production, forcing it to make the largest proportional cut among OPEC's members, Bloomberg News said.

"Angola in the long run might not be a hawk among OPEC members, but in order to show their commitment in the beginning, they will cut production," said Ehsan Ul-Haq, head of research at Vienna-based JBC Energy GmbH. "These are difficult days for everyone."

Oil prices fell 54 percent to US$44.60 a barrel in New York last year, the first annual decline since 2001 and the biggest drop since trading began in 1983. OPEC trimmed production three times as crude crashed from a record US$147.27 in July in the wake of the global economic crisis that cut world energy consumption.

Angola's priority as the head of OPEC will be to stabilize oil prices at a level which satisfies both consumers and producers, oil minister and OPEC's new president, Jose Maria Botelho de Vasconselos, said last month. The ideal price for OPEC is around US$70 to US$75 a barrel, he said. The country joined the group at the start of 2007.

The country cut scheduled shipments of crude in February by 13 percent from original plans, according to a loading schedule.