Global oil markets are oversupplied but Opec thinks it is too early for the group to take action to halt a recent decline in prices as fallout from the eurozone debt crisis sets in. Opec Secretary General Abdullah al-Badri said on Sunday global oil markets were oversupplied, urging greater compliance among members of the group.
"We have a lot of crude oil on land and offshore," Badri told reporters on the sidelines of the Arab Energy conference in Doha. "Opec already took action in December 2008 to reduce 4.2 million barrels (a day)," he told reporters. "We just have to abide by that...I am calling for more compliance."
US crude oil futures settled at $75.11 a barrel on Friday, posting their largest weekly loss in almost a year and a half, as worries grew that the eurozone's debt crisis might derail the global economic recovery.
Crude also hit its lowest level since February 16th on Friday at $74.51, after going over $87 a barrel early in the week. Badri said the drop in oil prices was linked to speculative play as the market was weighed down by uncertainty sparked by Greece's debt problems.
He said Opec had not set any target price when asked if $65 was a trigger for the group to act, a day after the Kuwaiti oil minister said prices at that level would force the group into action.
A senior Gulf Opec delegate told Reuters the impact of the Greek debt crisis on oil demand would be "limited" and that prices were unlikely to fall below $65 a barrel. "The economic crisis in Europe will be limited and contained."
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