Nov. 14 (Bloomberg) -- OPEC, supplier of more than 40 percent of the world's oil, will probably announce plans to lower supply for the third time in as many months to prevent prices plunging toward $50 a barrel, a Bloomberg survey showed. The Organization of Petroleum Exporting Countries will cut output at a meeting in Cairo on Nov. 29, according to 17 of 18 analysts surveyed by Bloomberg. Fourteen of the analysts predict the reduction will be 1 million barrels a day or more.``Given the rapid deterioration in the flow of economic data, and implications for further oil demand weakness, OPEC might have to cut by at least an extra 1 million barrels in order to catch the market's attention,'' said Harry Tchilinguirian, senior oil analyst at BNP Paribas SA in London.
The Cairo summit, originally intended for only the group's Arab members, was upgraded to a full OPEC meeting yesterday as oil prices dropped to a 21-month low. Oil futures in New York fell to $54.67 a barrel yesterday, the lowest since Jan. 30, 2007, and more than $90 below the record of $147.27 touched on July 11. Crude for December delivery traded at $56.44 as of 12:02 p.m. local time today.
Ministers from Algeria and Iran have said that production may have to be cut. The group announced a reduction of 1.5 million barrels a day on Oct. 24, on top of an earlier resolution in September to pare excess supplies by observing official output quotas. ``In order to strengthen prices, OPEC is very likely to recommend another production cut as the two previous ones had no effect,'' Iran's OPEC governor Mohammad Ali Khatibi told the Mehr News agency in Tehran today. ``The market is in turmoil.''
``Saudi Arabia, the UAE, and Kuwait might be happy with lower prices to help the global economy but will probably go along with an agreement for the sake of OPEC unity,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``I expect there will be another production cut announced in Cairo unless we have a massive rally before then,'' Beutel said.