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Iran to prepare budget based on $37 oil

Press TV - The global financial crisis has sharply slashed oil demand. The Iranian government will base its budget for the next calendar year on oil prices of over $37 a barrel, reveals an Iranian minister.

"The government and the parliament have agreed on setting an oil price of $37.5 a barrel in the next year's budget bill," Gholam-Hossein Nozari said on Sunday. The next Iranian calendar year begins on March 21, 2009.

"This price has been set in view of the oil market fluctuations. We should also be careful not to lose our main customers," he continued.

Iran is the second biggest oil producer in the Organization of Petroleum Exporting Countries (OPEC), which pumps about 40 percent of the world's oil.

OPEC decided in a December summit to cut output by 2.2 million barrels per day (bpd) starting in January in a bid to halt a sharp slide in oil prices, which have dropped from over $147 a barrel in July to about $46 due to falling demand.

The latest OPEC decision brings total cuts by the group from its September 2008 production levels to 4.2 million bpd.

Nozari added that the global financial crisis will prompt lower oil demand in 2009 and urged OPEC members to remain committed to their new reduced quotas.

A senior Iranian oil official said on Saturday that OPEC could meet in February -- a month before its next scheduled meeting -- to review the situation of crude markets for January.

"Maybe there is an idea that we may evaluate oil performance in January, therefore we may meet in February in Kuwait. But I have not seen any official invitation from the secretary-general or the president of OPEC," Iran's OPEC Governor Mohammad-Ali Khatibi told Reuters.

Some OPEC ministers will attend an Arab economic summit scheduled for Jan. 19 in Kuwait, which OPEC President Chakib Khelil said could be a forum for the group to evaluate the oil market and decide whether to hold an extraordinary meeting before March.

... Payvand News - 01/04/09 ... --

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