US$70-US$90 band for oil prices sought

VENEZUELAN President Hugo Chavez on Friday said Opec should create a price band for crude oil between US$70 and US$90 per barrell.

"Let's put that band back again, but not between US$22 and US$28 (per barrel) ... that was 2002, 2003, and it worked," Chavez said during the inauguration of a power plant.

"The band could be US$80 to US$90, US$70 to US$90, and we could perfectly handle that scenario," he said.

Opec on Friday announced it was taking 1.5 million barrels per day off the market after oil prices collapsed by half since July and by US$40 per barrel in the last month.

Opposition leaders and Wall Street analysts have said Chavez's self-styled revolution could face a financial crisis if oil prices continue falling, but Chavez insisted his government could withstand oil prices even of the late 1990s.

"If (prices) reached $7 per barrel again this revolution would not fall, it would actually get stronger I say that as a challenge," Chavez said.

Analysts said Opec could meet regularly over the coming months to announce further cuts in oil output as a worldwide recession weighs on energy demand and crude prices.

Opec is meeting on Dec 17 to review its decision to cut supply.

Even after the cut, the price of Brent North Sea crude sank to US$61, the lowest point for 17 months, as recession looms around the globe.

Following the Vienna gathering, DnB NOR Markets analyst Torbjorn Kjus said the cartel "probably needs to meet also in November ... to initiate further cuts to support prices".

Opec produces 40 per cent of world crude.