OPEC to cut output in March: Iraqi oil minister

BAGHDAD (AFP) – Iraq's oil minister on Saturday predicted that OPEC will cut production in March, and said that the price of a barrel of crude should not be less than 70 dollars, a senior official told AFP.

"The year 2009 will be a tough year around the world and that will be reflected on the oil demand and then prices will drop," Hussein al-Shahristani told an oil industry summit in Baghdad.

"In March, OPEC will convene and there will be an intention for more production cuts to shore up prices and encourage production from non-OPEC members," the minister said, according to his close adviser Falah al-Amiri.

Iraq sits atop the world's third largest proven crude reserves after Saudi Arabia and Iran, but is desperate for oil revenue to rebuild its war-shattered economy, especially with global prices sharply down.

The country's export ceiling before the 2003 US-led invasion was about three million barrels per day, but it now produces only 2.18 million bpd, of which 1.6 million are for export, according to OPEC figures.

On Friday New York's main futures contract, light sweet crude for delivery in March, fell 1.00 dollar to close at 40.17 dollars a barrel, on the back of demand concerns, stoked by a massive rise in unemployment in the United States.

In London, Brent North Sea crude for March slipped 25 cents to settle at 46.21 dollars a barrel.

Shahristani said that current prices were too low.

"We do believe that the price should be no less than 70 dollars for a barrel," his adviser quoted him as telling the Baghdad meeting.

Iraq last year launched its first international tender for development of nearly 20 oil and gas fields in a bid to ramp up its output ratio compared to its massive estimated reserves of 115 billion barrels.

More than 35 foreign companies took part in the first round of bidding, although hopes of a lucrative equity stake in Iraqi fields were dashed when the oil ministry proffered only service contracts.