Leading petroleum producer Norway said Monday it would cut its oil exports, boosting OPEC's efforts to ease a market glut that has oil prices at their lowest levels in years.
Norway's pledge came just before OPEC ministers were to start an emergency meeting Monday in Vienna. Oil Minister Marit Arnstad said the country would cut daily production by 3 percent, removing roughly 100,000 barrels from the world petroleum market.Norway, a non-OPEC member that is the world's second-biggest oil exporter after Saudi Arabia, said its cuts would take effect April 12 and last through 1998. It reserved the right to cancel its plans if OPEC fails to follow through on promised cutbacks.
With Norway on board, the pledges of production cuts by OPEC and non-OPEC members totaled around 1.5 million barrels a day - out of about 28.7 million now being produced daily. Independent analysts say oil exporters need to remove more than 2 million barrels a day from the market to see a lasting price increase.
Still, the pledges of lower production pushed prices about $2 per barrel higher on London and New York futures markets last week.
Prices were little changed Monday afternoon in London, with Brent crude oil to be delivered in May up 7 cents at $15.47 per barrel on the International Petroleum Exchange.
OPEC and its newfound non-OPEC allies, also including Mexico, Yemen and Oman, panicked when crude oil prices plunged this winter to their lowest level in nine years. Analysts blamed OPEC's decision in November to pump more crude, just as the Asian economic crisis and mild winter weather were eroding the market.
The cheap prices have been a bargain for consumers but devastating for producers. Libyan oil minister Abdalla Salem el-Badri says the collapsed market has cost OPEC $15 billion this year.
Some OPEC ministers said Monday that the group should do even more to try to increase prices.
Others disagree. Qatar's oil minister, Abdullah bin Hamad al-Attiyah said he was happy with what as been thus far pledged.