Opec chief expects members to back output reduction at Algiers meeting

Algiers: Ministers of the Organisation of Petroleum Exporting Countries (Opec) are in agreement on the need to cut output when they meet on Wednesday in Algeria to prop up sagging prices, Opec President Chakib Khelil said on Saturday.

"There is an Opec consensus on the reduction. But I cannot tell you [more]," Khelil said.

Since early September, the Opec has already agreed to reduce supply by a total of two million barrels per day (bpd).

Opec oil ministers are scheduled to meet in the western Algerian city of Oran on Wednesday amid expectations they will endorse a large cut in supplies to prevent further falls in oil prices.

Khelil, who is also Algeria's energy and mining minister, said Russia and some other non-Opec oil producing countries like Azerbaijan are to due attend the Oran meeting.

But he gave no further details about their possible contribution in trimming oil crude supply.

Hawkish stand

Iran's oil minister Ghol-amhossein Nozari's said he considered the "real price" for a barrel of crude should be more than $100 and a senior Iranian official said Opec needed to cut oversupply, Iranian media reported.

Saudi Arabia has said $75 a barrel was a fair price, comments echoed by an Iranian official this month. Other officials Opec have said Opec states needed $70 to $80 a barrel.

Global oil prices are now more than $100 below their July peak, trading around $46 on Friday.

"In my view, the real price for every barrel of oil must be above $100," Nozari told the Poul newspaper in an interview.

The minister of Opec's second biggest producer added: "We have never set a definite price for oil and we have always called for prices to reach their real level. Our policy in Opec has also been based on this."

Iran has traditionally been hawkish on prices and economists say the country needs prices to bounce back to around $80 a barrel to avoid a spending squeeze in next year's budget.

Asked about comments by some of his managers who have said prices between $70 to $80 were desirable, Nozari said: "This might also be a kind of strategy."

On consumers, Nozari added, "We believe that if prices do not attain the real level, consumers would incur more losses than producers since the desire for investment in the oil industry will drop with the disruption in balance between output and consumption," he said.

See also Page 56