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    OPEC TO CUT ITS DAILY OIL PRODUCTION BY 1MLN BARRELS

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    VIENNA, APRIL 1, 2004, RIA NOVOSTI - The Organization of Petroleum-Exporting Countries has decided to cut its daily oil output by 1,000 barrels starting April 1, despite fears that the cuts may push the world oil prices up even further. Wednesday's ministerial session in the cartel's Vienna headquarters confirmed this decision, tentatively made at a February session in Algeria, with the aim being to prevent the saturation of markets amidst a seasonal decline in the demand for fuels in the Northern Hemisphere.

    Some of the OPEC member states, such as Kuwait and the United Arab Emirates, insisted that the decision as to the quota cults should be put off until the next session, due June 3 in the Lebanese capital of Beirut. They cited the ongoing rise of world oil prices as a reason for the postponement. On the other hand, all the eleven members-including the world's largest producer of oil, Saudi Arabia (its output tops eight-and-a-half million barrels per day)-were unanimous in that the reduction of production quotas would help them prevent the oil prices from collapsing.

    The OPEC's main objective has always been keeping the oil world prices up to benefit the oil-producing nations. But objective economic laws-primarily the law of supply and demand-do not let the organization push the prices too high, and it now sees the $22-to-$28 range as fair enough. This price bracket suits Russia, too. OPEC production cuts by a million or two million barrels will not have any major impact on the average daily demand for 76-79 million barrels, and will be easily compensated for with supplies from independent producers, such as Russia, Norway, Mexico and Oman. All the more so since the OPEC's total output, despite some of the members overproducing in violation of the set quotas, does not surpass a daily 30 million.

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