Iranian Official Warns of Oil Price Fall to Below $20
The daily ***Abrar*** quoted Hojjatollah Ghanimifard, deputy head of the National Iranian Oil Company as saying the oil market is facing a surplus in supply of 1 million to 2.5 million barrels per day.
He said that should the Organization of Petroleum Exporting Countries (OPEC) decide in the cartel's January 17 summit in Vienna to cut its daily oil production by at least one million bpd, the oil prices would stabilize up to the end of the current Iranian calendar year (March 20, 2001).
The official anticipated that with an appropriate oil output hike, the OPEC basket price would reach $28 in nine months.
Last Tuesday, Iran's Oil Minister Bijan Namdar Zangeneh said OPEC members are "a little" at odds on the extent of a production cut ahead of the cartel's January 17 summit in Vienna, Iran's oil minister said Tuesday.
"Iran believes OPEC's output should be reduced. The rest of the members too hold the same view, but with a little difference as regards the level of reduction," he said.
Tehran's OPEC Governor Kazempour Ardebili said at the weekend that OPEC will adopt production curbs of three million barrels per day by spring this year.
"If OPEC decides to cut production on that date by 1.5 million barrels, production will be decreased by the same amount in spring," he said.
Iran is the second oil producer in OPEC cartel after Saudi Arabia.
OPEC President Chakib Khelil has said the cartel is expected to decide to cut oil output by between 1.5 and 2 million barrels per day (bpd) at its Vienna meeting on January 17, in an interview published Saturday.
"Qatar's energy minister is speaking of two million barrels and the Saudi (oil) minister of 1.5 million barrels. There is agreement that the cut will be between these two figures," Khelil told the London-based Arab newspaper ***Al-Hayat***.
On Friday, OPEC Secretary General Ali Rodriguez said the oil cartel was likely to agree on a cut of between 1 and 2 million bpd.
Most OPEC members have called for a decrease in oil production to offset lower prices as spring approaches in the Northern Hemisphere.
Oil prices edged up toward 26 dollars a barrel in London on Friday as the market braced for a hefty OPEC production cut.
In the meantime, the U.S. Energy Secretary Bill Richardson arrived in Saudi Arabia on Saturday as part of a tour to major OPEC states aimed at convincing the cartel not to make sharp cuts in production later this month.
U.S. Embassy officials in Riyadh told Reuters that Richardson will hold talks with Saudi Oil Minister Ali al-Naimi at 10.00 a.m. (0700 GMT) and would later meet Saudi Crown Prince Abdullah and other Saudi officials.
OPEC meets next week in Vienna and the Cartel is widely expected to reduce crude oil output by 1.5 million barrels per day.
Richardson left Washington on Thursday night. He stopped in Paris where he met representatives of the International Energy Agency to gain support for the U.S. position that OPEC should not make deep cuts in oil production and instead allow low world petroleum inventories to build.
The United States has been putting pressure on OPEC members to bring oil output up and oil price down.