OPEC Cuts Oil Production Despite U.S. Pleas
DAVID HAFFENREFFER, CNN ANCHOR: Well, there was a little surprise in the news that OPEC agreed to cut oil production despite pleas from the U.S. and other major western energy users.</s>DEBORAH MARCHINI, CNN ANCHOR: Energy Secretary Bill Richardson said he was disappointed by the move but pleased the reduction wasn't bigger. The latest report from the American Petroleum Institute shows U.S. oil stockpiles were still below comfortable levels. Tom Bogdanowicz reports on what OPEC decided to do.</s>TOM BOGDANOWICZ, CNN CORRESPONDENT (voice-over): The flurry of bilateral meetings in Vienna kept OPEC oil ministers on the move. But ultimately, they delivered exactly what world markets were expecting: cuts in production quotas of 1.5 million barrels per day.</s>ALI RODRIGUEZ, OPEC SECRETARY-GENERAL: We hope that this decision will not (ph) take (ph) the price between $20 to $28. And we hope that this decision will balance the relation between supplies and demand.</s>BOGDANOWICZ: The ministers said that they were worried that demand for oil will drop in the second quarter of the year. They needed to act now to poster the falling prices below their minimum target level of $22 a barrel for OPEC oil.</s>CHAKIB KHELIL, OPEC PRESIDENT: The concern is really for the second quarter, where, in general, demand has been much lower. So, nobody really knows what the fall in demand is going to be.</s>BOGDANOWICZ: What OPEC ministers are banking on is that Iraq, an OPEC member but not included in the quota system, will resume full production of around 2.8 million barrels per day, up to two months of interruption. Trouble is Iraq may not deliver.</s>LEO DROLLAS, ENERGY ANALYST: That can't be a foregone conclusion. That depends on the president, Saddam, himself. If he gives the OK, yes, it will happen. Otherwise, it won't. And it's a big uncertainty. We can't rely on Iraq.</s>BOGDANOWICZ: OPEC says it will take account of Iraqi outputs in future production adjustments. But more importantly, it's going to monitor oil prices. If they fall below its targets, there could be another production cut at its next meeting in March. Tom Bogdanowicz, CNN Financial News, London.