Saudi Oil Minister Ali al-Naimi said on Saturday Opec would cut oil output again when it meets in December if recent supply curbs failed to balance the market. Oil prices were not a decisive factor, said the oil minister of the world's top oil exporter and Opec's biggest producer.
The Organisation of the Petroleum Exporting Countries decided in October to cut output by 1.2 million barrels per day (bpd) from November, its first formal curbs in over two years, to respond to a 25 percent slump in oil prices.
"We must look at the impact of the measures decided in Doha, if they are adequate, we will be satisfied, if they are not we will act again and the aim is to bring stability back to the market," Naimi told reporters.
"The (oil) price is not an indicator, the indicator is stockpiles and the excess of supply over demand," he said. "The price is irrelevant, what is important is stability in the market and balance between supply and demand."
Naimi had said at Opec's emergency meeting in Doha in October that the group might need to cut a further 500,000 bpd when it meets next on December 14 in Nigeria.
US crude rose 66 cents to $59.90 a barrel on Friday, drawing strength from a disruption to supply in Nigeria and as a fall in the US dollar boosted other commodities. Naimi downplayed a recent fall in the dollar. "Is this the first time? (Exchange rates) always fluctuate."
A weaker dollar could encourage Opec to seek a higher oil price because its income from dollar-denominated oil sales is eroded. Oil has tumbled from a record $78.40 hit in July, as bulging fuel stocks in consumer states and doubts over whether Opec would implement supply curbs in full spurred investor selling.
On Wednesday, oil dropped nearly $1 after a US government report showed crude stocks rose a more-than-expected 5.1 million barrels last week, adding to ample supplies. Asked about high inventories in the world's top consumer, the United States, Naimi said: "This has been the case for some time now. The objective of stockpiles is to help stabilise supply and demand but when there is a large surplus it affects the stability of the market."
Naimi has repeatedly said that bringing inventories in consumer nations into equilibrium is the main aim of Opec, which pumps more than a third of the world's oil. On November 15, Opec said if it kept pumping at current rates, fuel stocks in industrialised consumer nations would rise more rapidly than normal in the second quarter of 2007. Opec ministers are concerned about possible further sharp price falls next year when the northern hemisphere winter ends.
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