Opec could agree on output cut this month

Tehran: Iran's Opec governor said on Monday the group could agree to cut output when it meets this month because of a fall in oil prices, Mehr News Agency said.

Oil has fallen from a record level of just above $147 a barrel in July to around $116 a barrel on Monday.

"In view of the drop in oil prices, there is this possibility that Opec would approve an output cut in its upcoming meeting in Vienna," Mohammad Ali Khatibi told Mehr.

Iranian Oil Minister Gholamhossein Nozari said on Sunday that $100 a barrel was the lowest appropriate price for oil, echoing a figure cited by another price hawk in the Organisation of Petroleum Exporting Countries, Venezuela.

Even as prices surged to all-time highs this year, Iran said the market was oversupplied with crude and blamed the price surge on other factors, such as speculation and geopolitics.

"The supply of oil is more than demand in the market. If Opec is interested in removing the excess oil from the market, it must approve the output cut plan," Khatibi told Mehr.

Irrational trend

Most commentators predict Opec will leave output targets unchanged when its meets in Vienna on Sep-tember 9.

Venezuela, like Iran, has spurned calls from consumers like the United States to hike output, even when prices surged.

But Venezuelan President Hugo Chavez, in a departure from previous rhetoric, said in early Aug-ust it was a good thing oil prices had fallen. He said the price should settle near $100 a barrel, calling prices near $150 "irrational."

Khatibi said big consumers were hurting their interests by imposing sanctions on producers. He did not mention names but it was clearly directed at the countries like the United States which have targeted Iran over its disputed nuclear programme.

"The enforcement of these sanctions will disrupt the production of oil and cause consuming countries to pay more for the oil they buy," Khatibi said.

Washington and its Western allies accuse Tehran of seeking to build nuclear warheads, a charge Iran denies.

The world's fourth big-gest oil producer and No 2 Opec producer says it is mastering nuclear technology to generate electricity.