Opec may decide to cut output next week

The Organization of Petroleum Exporting Countries (Opec) will probably agree to reduce oil output at its meeting next week, Venezuelan Finance Minister Ali Rodriguez said.

Opec, which supplies more than 40 per cent of the world’s oil, brought forward to next week a November meeting to discuss output levels. Oil has tumbled more than 50 per cent from a record $147.27 in July.

“It’s very likely that, given the price decline, Opec implements stabilisation measures,” Rodriguez said late yesterday in an interview broadcast by state television. “It’s very likely that that there’s a cut in production.”

Venezuela, the fourth-biggest supplier of foreign oil to the US, will see its trade surplus decline as oil falls closer to $60 a barrel, which is the price the government is using to calculate its 2009 budget, Rodriguez said.

The country’s international reserves are well “guarded,” with 60 per cent held in Switzerland, 30 per cent in gold and 10 per cent in other investments. Venezuela’s almost $40 billion in reserves, plus its other savings in various government-controlled investment funds, including its off-budget National Development Fund, provide a cushion, he said.