Libyan official hints at Opec output cut

Dubai/Tehran: The Organisation of Petroleum Exporting Countries (Opec) may decide to cut production further when it meets in Cairo this week, Libya's top oil official Shokri Ghanem said.

"It is too early to say how much needs to be cut," Ghanem said in an interview from Tripoli on Monday. "I don't want to start throwing numbers out without consulting my colleagues - we want a consensus."

Slowing global demand has left a 1 million barrel-a-day oversupply that needs to be removed by year-end, Venezuela's Oil Minister Rafael Ramirez said on Sunday. Crude prices are down 66 per cent from a record $147.27 (Dh540.48) a barrel on July 11.

Opec, supplier of more than 40 per cent of the world's oil, will discuss compliance with a previous cut at the November 29 meeting in Cairo, according to Ghanem. "We won't have production data yet, but at least we can consult with each other. It does not mean we can't take a decision," he said.

Opec's main goal is to stabilise the market, Ghanem said.

"We are worried about the direction of prices - we need to see if the oil price is falling because liquidity is leaving the market or if there is too much oil in the market," he said in the interview.

As well as this week's meeting in Cairo, Opec is due to hold another summit in Algeria on December 17 after its decision last month to slash production by 1.5 million barrels a day failed to stop oil prices crashing to below $50 a barrel.

Iran's Opec governor said in remarks published yesterday that the group needs to reduce output further as falling oil prices had shown its 1.5 million barrel per day (bpd) cut from November 1 was not enough. "Of course, market prices show this Opec measure [from November 1] was also not able to prevent a fall in oil price. Therefore, to prevent this trend it is necessary for Opec to make a further reduction," Iran's Opec Governor Mohammad Ali Khatibi said.

Speaking to Resalat newspaper, he said Opec and non-Opec oil exporters should "interact to stabilise the market".

"There is no balance between supply and demand, therefore, right now the market is oversupplied," he said. Iran has previously said it wanted Opec to reduce oil output by a further 1 to 1.5 million barrels per day (bpd), in addition to the cut that was implemented on November 1.

Asked how long the trend of weak oil prices could continue, he replied: "Based on the most optimistic view, this economic crisis will last one year and by the end of next year we will witness signs of improvement."