Naimi said Tuesday that the oil market is “fairly well balanced,” suggesting that the 13-nation OPEC meeting here later Tuesday would decide to keep crude production steady, despite their concerns over rapidly falling prices. “I think things are in balance, inventories are in a healthy position,” Naimi told reporters on arrival in Vienna in the dawn hours of Tuesday. His comments appeared to rebut calls for a cutback from Iran, OPEC's No. 2 producer and a traditional OPEC price hawk. “We believe the market is oversupplied,” Iran's oil minister, Gholam Hossein Nozari, told reporters Monday. Other OPEC ministers have been less strident in calling for a tightening of the oil spigots, despite a nearly 30 percent tumble in oil prices after they neared $150 a barrel in July. OPEC nations account for two-thirds of the world's known oil reserves, and about 40 percent of the world's oil production, affording them considerable control over the global market. Venezuelan Oil Minister Rafael D. Ramirez said there was no immediate need to lower production – even while warning of a likely oversupply by year's end. “We think we can keep ... current output levels,” he told reporters. Still, he suggested that OPEC would have to consider cutting back in the coming months, saying the organization estimated that demand would fall by close to 1 million barrels by December. That, and present overproduction of 1 million to 1.5 million barrels a day means “we need an action plan from here to December to keep the market balanced,” he said. Others urged more production discipline aimed at reducing the overhang left by members producing above individual quotas. 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.” Asked how discipline should be re-established, he said that OPEC members should be urged to curb output in line with assigned quotas. Mohammed Abdullah Al-Aleem – Kuwait's oil minister and a member of an OPEC committee whose recommendations could influence OPEC's final decision about output – said there is no need for OPEC to cut production “for the time being.” But OPEC President Chakib Khelil warned of looming oversupply. Saying “there is plenty of oil on the market,” Khelil forecast that daily oil output would exceed demand by between 500,000 and 1.5 million barrels a day by the end of the year or early next year. Asked what OPEC's likely decision regarding output would be, Khelil said “all options are open.” With most of the oil ministers observing Ramadan, the meeting was postponed until late in the evening, and a decision was not expected before early Wednesday. Benchmark crude for October delivery dropped $1.23 to $105.11 in electronic trading on the New York Mercantile Exchange by afternoon in Dubai. The contract inched up 11 cents to settle at US$106.34 following a volatile session Monday, as Hurricane Ike threatened oil and gas facilities in and around the Gulf of Mexico.
