Minister Expects Oil Demand To Drop

Monday, January 22nd 2001, 12:00 am

By: News On 6

CARACAS, Venezuela (AP) â€” Venezuela's oil minister on Monday said he expected global demand for crude oil to drop by almost 2 million barrels a day in the second quarter and did not discard the possibility of another OPEC output cut in March.

The Organization of the Petroleum Exporting Countries will monitor the market between now and its March ministers' meeting in Vienna, Austria to decide whether more production cuts are necessary, said Alvaro Silva Calderon at a news conference.

Concerned that a seasonal drop in demand would trigger a collapse in oil prices, OPEC last week agreed to slice output by 5 percent, or 1.5 million barrels a day.

In an apparent late reaction to OPEC's announcement, February crude futures rose $1.74 on Friday, closing at more than $32 a barrel on Friday â€” their highest level since early December. February crude was unchanged Monday on the New York Mercantile Exchange, while crude for March delivery fell 39 cents to $29.20 a barrel.

OPEC wants prices for its basket of world crudes, which typically is less than crude traded on the Nymex, to remain between $22 and $28 per barrel.

The 11-member cartel produces 40 percent of the world's oil. Venezuela is the world's third largest oil producer.