UPI Energy Watch

Qatar to cut oil output

Leaders in Qatar said they are currently producing more than their quota from the Organization of Petroleum Exporting Countries and will reduce their oil production to comply with OPEC.

"We are cutting to restrict ourselves to the official quota, as we agreed in the OPEC meeting," Abdullah bin Hamad al-Attiyah, Qatar's deputy prime minister and energy minister, told the Gulf Times.

He said the amount of oil being halted is small. Qatar pumped about 880,000 barrels a day of oil in September, and the quota from OPEC to which al-Attiyah referred is for 828,000 barrels per day. Qatar will be cutting, then, about 50,000 barrels of oil production per day, the Gulf Times reported.

In September, OPEC ministers agreed at their meeting to set a production limit of 28.8 million barrels per day in order to curb what OPEC Secretary-General Abdullah al-Badri called "oversupply."

Al-Attiyah told the Gulf Times there is no strong or overwhelming demand for Qatar's oil right now.

The price of oil, which has fluctuated almost daily on economic concerns, fell again Wednesday on predictions of sliding demand and economic worry. Prices rose Tuesday after OPEC reportedly was discussing further production cuts, and an interest rate cut in Australia triggered speculation that other banks might do the same.

Arjun Murti, a Goldman Sachs Group analyst, is now predicting continued low oil prices as well.

Forecasts of oil production fall.

Based on the current economic crisis that is spreading across the globe, the U.S. Energy Information Administration recently cut its forecast for non-OPEC oil production growth for 2009 by 140,000 barrels per day to 730,000 barrels per day, U.K. Web site OilVoice reported.

The EIA's first forecast for 2009 production projected there would be an increase to 890,000 barrels per day.

As people all over the world try to cut back, oil demand continues to slow down -- and production with it.

"The current slowdown in economic growth is contributing to the recent decline in oil demand and the sharp decline in prices since July," an EIA representative said. "Nonetheless, oil markets are expected to remain relatively tight because of sluggish production growth."

Because OPEC is voluntarily cutting its production and non-OPEC producers cannot afford to produce as much, the EIA also projects that sometime during the next six months it is likely that demand, and prices, will increase again when supplies fall to a certain threshold.

Italy's Eni will work in Papua New Guinea.

Under an agreement that Italian firm Eni signed Wednesday with the Independent State of Papua New Guinea, Eni will complete an exploration study and a data acquisition program for the unexplored areas in the country. The goal is to help to better understand the remaining oil and natural gas reserves Papua New Guinea holds.

An Eni representative also said in a statement that the company would be interested in jointly developing any projects that it finds. In order to expedite the process, Eni will open a local office.

Papua New Guinea Prime Minister Sir Michael Somare met with Eni Chief Executive Officer Paolo Scaroni, and Eni said he was pleased with the deal.

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Closing oil prices, Oct. 8, 3 p.m., London

Brent Crude oil: $84.90

West Texas Intermediate crude oil: $90.18

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(e-mail: energy@upi.com)