VIENNA, March 31 (UPI) -- OPEC's decision to curb crude oil production by more than 4 million barrels per day was the right move to control prices and supplies, a Saudi official said.
Ibrahim al-Muhanna, adviser to Saudi Oil Minister Ali Naimi, said in a paper to his colleagues at the Organization of Petroleum Exporting Countries that criticisms of the oil cartel's policies were unfounded, the Platts news service reports.
"Time has proved OPEC right and its critics wrong," he wrote.
OPEC moved to cut oil production in an effort to control the precipitous decline in energy prices as oil has sacrificed more than $100 per barrel from its July peak. World crude prices, however, have held steady at around $50 per barrel for months as the global economy sank further into recession.
Critics say OPEC production cutbacks could backfire by further destabilizing a shaky world economy and push down prices even further.
Muhanna said that if the economic situation improves in 2009, oil demands would see a moderate increase, but if market conditions continue to stagnate, there may be suppressed demand for years.
He predicted oil demand would fall more than 1 million barrels per day in 2009, the lowest level in a quarter-century.
