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By Samuel R. Avro on Feb 8, 2009 with no responses

Iraq Says OPEC to Cut More Production in March

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The Organization of Petroleum Exporting Countries (OPEC), in an effort to boost sagging oil prices, will cut production even further when the group meets next month, according to Iraq’s oil minister.

“In March, OPEC will convene and there will be an intention for more production cuts to shore up prices and encourage production from non-OPEC members,” said Hussain al-Shahristani.

He also added that the current price for crude was not where it should be.”We do believe that the price should be no less than $70 for a barrel,” he said.

The minister made the comments at a symposium in Baghdad on developing Iraq’s oil and gas industry.

OPEC, whose members account for approximately 40 percent of the world’s oil production, has been making unprecedented production cuts in an effort to boost prices. So far, those cuts have yet to have enough of an effect on crude oil futures which have plummeted since reaching a record high of above $147 per barrel in July of last year.

“The year 2009 will be a tough year around the world and that will be reflected on the oil demand and then prices will drop,” said al-Shahristani.

Ninety percent of Iraq’s national budget is funded by their oil exports.

In December, OPEC announced a 2.2 million barrel per day production cut, which came on top of an earlier 2 million barrels per day already pulled off the market.

Iraq, which sits atop the third largest oil reserves in the world, plans to add 4 million to 4.5 million barrels a day to its current 2.4 million barrels per day capacity over the next four to six years.

Crude oil future prices dropped a dollar on Friday to close out the week at $40.17 a barrel on the New York Mercantile Exchange.