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OPEC To Field Calls For Reduction In Production

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The Associated Press

Published: September 9, 2008

VIENNA, Austria - There is too much crude on global oil markets, senior oil officials from Iran and Libya said Monday, as the price of oil continued a two-month slide.

But the energy minister of the United Arab Emirates said OPEC's policy of keeping the world oil market "well supplied" has not changed.
Minister of Energy Mohammed Bin Dhaen al-Hamli was also quoted by the United Arab Emirates' state news agency as saying that crude oil stockpiles in heavily consuming countries are within recent average levels.

Al-Hamli added that decisions on production levels are based on whether the market is well supplied, and the recent fall in prices shows that the earlier rise was "too high, too fast."

The comments came on the eve of a meeting of OPEC oil ministers who will discuss production levels. Oil prices have fallen nearly 30 percent from their highs of $147 in July.

Iran, the group's No. 2 producer, has been one of the most vocal proponents of tightening the oil spigots.

"We believe the market is oversupplied," Iran's oil minister, Gholam Hossein Nozari, told reporters.

Echoing those comments, Shokri Ghanem, the chairman of Libya's National Oil Corp., told The Associated Press, "There is a glut in the market that warrants creating order."

He said that OPEC members producing above assigned quotas should be urged to curb output.

Saudi Arabia, the dominant OPEC member, boosted production by 250,000 barrels per day after repeated protests from Western nations and direct pleas from President Bush.

Libya's Ghanem now says the market is oversupplied.

"There is a lot of oil in the market, much more than demand," he said.

If production is cut, most industry experts expect it will be a token amount, though it would come two months after crude prices hit all-time highs.

But the tumble in oil prices may have given the 13 members of the Organization of Petroleum Exporting Countries an opening to review production levels.

Light, sweet crude for October delivery fell $1.38 on Monday to $104.85 on the New York Mercantile Exchange.

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