Opec chief: Prices have hit the floor

19/12/2008

Crude oil has hit its floor price, Chakib Khalil, president of the Organisation of the Petroleum Exporting Countries (Opec), has claimed.

Speaking to Reuters, the cartel chief said that he expected that the supply cut of 2.2 million barrels would be adequate to push crude prices back up, which in turn could lead to rises in the cost of heating oil, DERV, farm diesel and other distillates.

"It will have an effect as soon as the market will see the member countries will be applying all the cuts from January 1st," he said.

He added that ministers from Opec members will be able to give an accurate picture of the post-cut market at the upcoming global energy summit to be held in Kuwait on January 19th.

This month's supply cut has as yet failed to boost crude prices, while heating oil has also remained subdued.

Announcing the constriction earlier this week, Mr Khalil said that he hoped that it would shock investors.