MercoPress. South Atlantic News Agency

OPEC's production unchanged but alert to falling oil prices

The Organization of Petroleum Exporting Countries, OPEC, meeting in Vienna said Monday it will keep pumping crude at current levels, while also making clear it would consider scaling back production if oil prices keep plummeting.

OPEC pledged to "vigilantly monitor" the combination of rising inventories and easing political tensions that have pushed crude down by almost 13 US dollars a barrel since northern hemisphere midsummer.

The eleven nations group said the quota will remain at 28 million barrels a day, acknowledging that supplies are "more than adequate" to satisfy world demand. Including Iraq, which is not bound by the quota system, OPEC's daily production is roughly 30 million barrels.

But the group, which produces 40% of the world's crude, is keeping its options open in case prices don't stabilize. OPEC President Edmund Daukoru, who is also Nigeria's oil minister, said he would consult with other members "should market conditions warrant" action before they meet again in December.

Light sweet crude hit a record 78.40 US dollars in mid-July, just after fighting erupted in Lebanon, but the hostilities have ended _ and tensions over Iran's suspect nuclear program, which also stoked prices, are easing amid progress in talks aimed at averting U.N. sanctions. Light sweet crude for October delivery fell as low as 64.85 Monday on the New York Mercantile Exchange before settling at 65.61, a decline of 64 US cents.

Some OPEC ministers, including Iran's Kazem Vaziri Hamaneh, had suggested that prices shouldn't be allowed to fall below 60 US dollars the barrel. Daukoru said a consensus emerged about the optimal price, but was evasive when asked what that was, saying: "It's a marketplace. ... It cannot be specified."

However Venezuela's Energy Minister Rafael Ramírez said OPEC must closely monitor oil markets, "we can't let the price of oil plummet; we believe it shouldn't drop below 60 US dollars per barrel".

Ramírez said that "some measure will have to be taken towards the end of the year or early 2007; the oil market is well supplied, plenty of reserves so it's only natural to begin cutting excess production".

Ali Naimi, oil minister of Saudi Arabia, the world's main oil exporter, said Monday he was "very optimistic" about global oil demand next year, playing down concerns that world economic growth may be slowing and characterizing recent price drops as insignificant "blips."

Supplies remain ample despite concerns over Iran, chronic outages in Iraq and attacks on oil infrastructure by militants in Nigeria _ Africa's biggest producer. U.S. inventories are at their highest levels since 1998, the Department of Energy reported last week.

Daukoru also expressed concern that prices could face further pressure in 2007 if production from non-OPEC nations such as Angola, Brazil and Caspian Sea countries like Azerbaijan rises significantly as expected. In the longer term, however, he expressed confidence that OPEC's market share would increase because the outsiders can offer only crude that needs more refining, not the higher-quality light sweet crude that the cartel offers.