OPEC members pushing cut in oil production

VIENNA, Austria — Iran and Venezuela on Thursday urged OPEC to quickly slash output and stem a steep slide in prices that has left crude at its cheapest in 15 months — and some member countries scrambling to balance their books.

But OPEC's power to raise prices by cutting supply may be fading amid a global economic crisis that has evaporated demand for oil.

The latest weekly report from the U.S. Department of Energy shows that demand has fallen in 38 of the past 42 weeks. U.S. demand is down nearly 10 percent during the past four weeks year on year. The U.S. still consumes one out of every four barrels of oil produced.

"This is not a supply issue," said trader and analyst Stephen Schork. "OPEC can affect supply but they can't touch the demand side, which right now is a house of cards."

Iranian oil minister Gholam Hossein Nozari told reporters, on the eve of an emergency OPEC meeting to address evaporating prices, that a cut of "2 million (barrels per day) will stabilize" the market. And Rafael D. Ramirez, his Venezuelan counterpart, also left little doubt on where he stood.

"We have to take some action now, now," Ramirez said, telling reporters that the 13 OPEC oil ministers meeting today will reach "consensus to take a very, very, very fast action."

Both he and Iraq's oil minister said their nations may be forced to rethink or cut spending next year.

Other oil ministers of the Organization of Petroleum Exporting Countries also said output cuts had to be on the table during their meeting — but were well aware that if production is tightened too much, the resulting price spikes could knock a wobbling global economy even further out of kilter.

Their comments reflected both OPEC alarm over crude's fast fall and concern about how to remedy the situation without bringing ruin upon themselves. In the past, sizable cuts in OPEC production have led to significant jumps in prices. But with demand already falling due to the economic downturn, even a large reduction may fail to prop up the market.

The emergency meeting was initially scheduled for Nov. 18, but that was abruptly rescheduled for today as oil prices continued to fall away.

"They're in a bit of panic," said Schork. "They underestimated what happens when the bubble implodes."