AFP: Crude producer Iran said on Sunday that the world oil market is oversupplied by two million barrels a day after OPEC decided to leave its oil output quota unchanged amid falling prices.
TEHRAN (AFP) — Crude producer Iran said on Sunday that the world oil market is oversupplied by two million barrels a day after OPEC decided to leave its oil output quota unchanged amid falling prices.
"There is oversupply of two million barrels per day on the market and we are seeking to create a balance between demand and supply," Oil Minister Gholam Hossein Nozari told reporters.
The Organisation of Petroleum Exporting Countries left its oil output quota unchanged on Saturday at informal talks in Cairo but vowed to take any action necessary next month to balance the market.
Asked whether OPEC should consider a cut at its meeting in Algeria on December 17, Nozari said: "We should study and examine market conditions," adding that market stability had improved in the past few days.
Before the Cairo meeting Iran had said it favoured a cut of one to 1.5 million bpd.
Last month, OPEC ministers agreed at a meeting in Vienna to reduce production by 1.5 million to 27.3 million barrels a day but the market has continued to slump.
"The depth of this (global financial) crisis was too much, thus the earlier supply cut decision was not very effective and we hope that with the next decision (in Algeria meeting) OPEC can reach its goal better," Iran's OPEC envoy Mohammad Ali Khatibi told reporters.
Khatibi predicted that OPEC's supply cut would come in several stages.
"We should follow up the trend of this crisis and watch the (oil) demand decrease in order to control this crisis through several decisions," he said when asked what would be Iran's supply cut target in the organisation's next meeting.
"It is a high expectation to think that everything can be controlled with only one decision… even if the next decision proves to be ineffective, OPEC members are very serious… in bringing back stability to market by further steps if necessary."
Slumping demand in the face of a global economic downturn has sent prices crashing by about two-thirds to around 50 dollars from record highs of some 147 dollars a barrel just four months ago.
"We hope that prices do not go lower than 50 dollars per barrel and even if they do, it is not surprising because of the deep crisis."
Iran is the second largest exporter in OPEC, which produces about 40 percent of the world's crude, and its economy is heavily dependent on oil revenues.