OPEC needs big supply cut to stem oil's slide

LONDON (Reuters) - OPEC needs to make a large cut in supplies at a meeting next week, its third reduction since September, to prevent further falls in oil prices as world demand slumps due to slowing economies.

The group should cut output by at least 1 million barrels per day (bpd) at the December 17 meeting, OPEC delegates and analysts said. Some suggest the minimum should be 2 million bpd, a cut of 7.3 percent from OPEC's collective output target of 27.3 million bpd.

"The whole world economy is in turmoil," Shokri Ghanem, Libya's top oil official, told Reuters. "We think this needs substantial action."

That may prove a challenge given the signs of a lack of unity among OPEC members that emerged at a meeting last month which put off taking any decision on supply until December.

Since the Cairo meeting, oil has hit a four-year low near $40 a barrel.

Apart from Libya, Iran and Venezuela have also called for the Organization of the Petroleum Exporting Countries to cut output further. But Saudi Arabia, OPEC's top exporter, has yet to publicly back another reduction.

OPEC has implemented two-thirds of a November 1 agreement to cut output by 1.5 million bpd, according to Reuters estimates. At a meeting in September, it decided to lower supplies by about 500,000 bpd.

But analysts and traders say OPEC needs to do more than improve compliance. Nauman Barakat of Macquarie Futures USA said a further cut of more than 2 million bpd was needed. Others expected at least 1 million bpd.

"To do nothing is not an option, that's what we saw last time," said Rob Laughlin, oil analyst at MF Global.

"I'm looking for a 1.0 million-barrel to 1.5 million barrel cut. If they fail to do that, they will lose further confidence in the market."

CREDIBILITY PROBLEM

While OPEC does not have a formal price target, Saudi Arabia's King Abdullah said last month that $75 a barrel was a "fair price" for oil, a view later backed by other OPEC members including Kuwait and Nigeria.

Even so, without a big supply cutback that is swiftly implemented and communicated by OPEC members to their oil buyers, $75 oil may remain more of an aspiration than a reality.

"The problem OPEC faces is one of credibility," said David Hufton of brokers PVM in a report. "They need another cut of 2 million bpd, backed up by full compliance and prompt notice to lifters."

"If OPEC is indecisive and unconvincing on December 17, they risk meeting again in Q1 next year with crude at $30."
OPEC's ability to prop up the market would gain a boost if it secured the cooperation of non-member countries, such as Russia.

Russia, the largest non-OPEC oil exporter, plans to send a senior team to the December 17 meeting in Oran, Algeria. It has worked more closely with OPEC in recent months and agreed to cooperate with the group to study the market.

The Russian delegation in Oran is likely to be accompanied by top executives from state and private oil producers such as Rosneft (ROSN.MM: Quote, Profile, Research, Stock Buzz) or LUKOIL (LKOH.MM: Quote, Profile, Research, Stock Buzz), industry sources said.

LUKOIL executives have been calling on the government to join OPEC to protect budget needs and allow the firm carry on with costly projects, although state officials have said Moscow would keep independent policies.

A pledge from Russia to cut supply, plus 2 million bpd in curbs from OPEC, should help send prices back to $75, Hufton said.

"Support from Russia with a 500,000 bpd cut should ensure that the mission will be accomplished," he said.

The competition was organized by Islam Channel

Britain's Muslims have voted East London Mosque and London Muslim Centre as their Super Model Mosque for 2008.

The competition was organized by Islam Channel as one of the sub events that were presented during the Global Peace and Unity Event (GPU) at the London Excel Arena on 26th November.

The final was contested by East London Mosque, London Muslim Centre, and the Islamic Cultural Centre in Regents Park for the prize of a £50,000 consultation. East London Mosque won the competition with a massive vote of support from the public.

East London Mosque and London Muslim Centre got to the final after facing Sparkbrook Islamic Centre, Birmingham, in the semi-final.

A New Section to Be Built

Ayub Khan, the secretary of the East London Mosque, commented, "This is a great honor for our mosque and centre. Over the years, we have worked tirelessly to build a centre with facilities and services that everyone can use regardless of age, ethnicity or religion. The prize will go towards a centre of excellence for Muslim women and girls. For a long time, we have been looking to address that need and the prize will immensely help."

The mosque is in the planning stages of building a new section which will house dedicated services for women as well as new prayer space for all.

He went on saying, "The management committee and the staff of the mosque would like to congratulate Regents Park Mosque on getting to the final, Islam Channel on holding such a great initiative, and also thanks to all those who voted for us and have supported us."

One of the Imams of the Ka`bah, Sheikh Adel Salem Al Sheikh, led the congregational evening prayer last night at the East London Mosque.

Over 2000 people came to the mosque to pray behind the sheikh and hear him give a short talk after the prayer.

In his speech Sheikh Al Sheikh described the characteristics of Prophet Muhammad (Peace and Blessings be upon him) and encouraged the congregation to follow his example.

His visit ended with a tour of the mosque and centre.