Kuwait is the forever US best friend, but it's not the case of the other producing countries. My feeling is that, at the end of the meeting, some countries are going to cut production, just to give a boost to the price and leave it over 100$. If not the price will go lower.
VIENNA, Austria (AP) -- Kuwait's oil minister said Monday that there is no need for OPEC to cut production, despite crude prices that have fallen nearly 30 percent since July.
Mohammed Abdullah Al-Aleem is part of an OPEC committee whose recommendations could play in OPEC's final decision on what to do about output.
He spoke on the eve of a meeting of oil ministers from the Organization of Oil Exporting Countries who will decide whether to reduce production or keep it at current levels.
"For the time being ... there is no need to cut production," Al-Aleem said, but he added that current supply had outpaced demand.
While officials from Iran and Libya who said there is too much crude on the market, the energy minister of the United Arab Emirates said OPEC's policy of keeping the world oil market "well supplied" had not changed.
Minister of Energy Mohammed Bin Dhaen al-Hamli was also quoted by UAE's state news agency as saying that crude oil stockpiles in heavily consuming countries are within recent average levels.
Oil prices have fallen nearly 30 percent from their highs above $147 a barrel.
OPEC President Chakib Khelil seemed to support, at least in principle, the stance that current oil supplies are enough to satisfy global demand.
"Definitely, there is plenty of oil on the market, " Khelil said upon arriving in Vienna, forecasting that by the end of 2008 or early 2009, daily oil output would exceed demand by between 500,000 and 1.5 million barrels.
Asked what OPEC's likely decision regarding output would be, Khelil said "all options are open."
As with most other OPEC officials, Khelil blamed speculators and a weak U.S. currency for the run-up in oil.
"What we are seeing now is that the inverse relation between the U.S. dollar and the oil price is verified," Khelil said.
Iran, the group's No. 2 producer, has been among the most vocal proponent of tightening the oil spigots.
"We believe the market is oversupplied," Iran's oil minister, Gholam Hossein Nozari, told reporters, adding that the ministers planned to make a decision on what to do about production after their review Tuesday.
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 in line with those limits.
"There is a lot of oil in the market, much more than demand," he said.
No one is predicting much of a cutback at Tuesday's meeting -- if any at all. Still, such a move would not even have been thought of with oil prices setting record after record back in July.
But the bull run appears to have paused, if not ended, which could provide some wiggle room at OPEC's Vienna headquarters.
Since crude surged to a record $147.27 a barrel on July 11, it has tumbled by over $40.
Light, sweet crude for October delivery rose a modest 11 cents Monday to settle at $106.34 a barrel on the New York Mercantile Exchange, as Hurricane Ike threatened oil and gas facilities in and around the Gulf of Mexico.
On Friday, however, the contract fell by $1.66 to settle at $106.23, a five-month low.
The downward spiral has led Iran to suggest that it is time to reduce output from the nearly 30.5 million barrels a day being pumped last month by the organization's members.
Still, a major cutback is unlikely without Saudi compliance, and the Saudis -- de-facto OPEC policy setters who are now producing nearly a third of total OPEC output -- have given no hint they favor that option. Saudi Oil Minister Ali Naimi has instead talked about a floor of $80.
OPEC has reason to be cautious.
Despite their precipitous fall, prices remain 14 percent higher this year than in 2007, and a barrel of benchmark crude still fetches four times what it did five years ago.
Any OPEC move Tuesday to pare back output would result in protests from the U.S. and other major consumers.
Despite their precipitous fall, prices remain 14 percent higher this year than in 2007, and a barrel of benchmark crude still fetches four times what it did five years ago.
Additionally, OPEC understands that high prices drive down demand and will likely try to find a balance between high profits and a price that the market can accept.
That middle way would mean agreeing to pare away at overproduction without reducing the overall output quota of 27.3 million barrels a day set in November for the 12 OPEC members under production limits.
Associated Press writer George Jahn contributed to this report from Vienna.