OPEC May Cut Oil Output By 2 Million Barrels On Dec. 17 As Prices Tumble

London, UK (AHN) - The 13-member crude oil cartel Organization of Petroleum Exporting Countries (OPEC) is expected to meet in Oran, Algeria, to discuss the potential output cut from the existing level to increase oil prices.

Iran said it will propose OPEC to cut crude production by 1.5 million barrels per day to 2 million barrels per day, after delaying the decision in its previous meeting on November 29 in Cairo, Egypt.

"The proposal aimed at creating a balance in oil supply and demand in the market," IRNA quoted Oil Minister, Gholam-Hossein Nozari as saying while talking to reporters on Sunday.

"Otherwise, the OPEC would face a surplus in oil supply which would result in more fall in the price next summer," Nozari added.

During the previous talks, most of the OPEC countries felt a need to postpone the decision as were not sure about the impact of previous oil output cut decision, without which they may not be able to decide the fate of current decision.

The market analysts were expecting the group to finalize their decision to slash supplies by as much as 2 million barrels per day amid rising concerns on dropping oil prices and declining gasoline demand in huge markets like the United States.

The decision to slash oil production will reduce the OPEC's current official daily output quota of 27.3 million barrels, excluding Iraq.

OPEC, which pumps out almost 40 percent of globe's total oil production, will now try to level the prices of crude to range between $70 per barrel and $100 per barrel.

On Nov. 1, OPEC had decided to cut around 5 percent or 1.5 million barrels per day of production. Despite product cut, oil prices have tumbled by more than 70 percent from the peak of $147.27 on July 11. Crude was recently down to $40, which is the lowest level since 2004.

The OPEC members collect 90 percent of their total revenues from international oil exports.

Last month the OPEC said the member countries have lost more than $700 billion since the drop of oil prices and some members even complaint of having hard time selling the barrels as the countries deal with increased domestic stockpiles.