OPEC may consider reducing output again if oil prices fall, Algeria's energy and mines minister said on Saturday, adding that he expected a sharp decline in oil demand in the second quarter this year.
The minister, Chakib Khelil, said that prices would nevertheless stabilise in that quarter.
"Prices...would stabilise in the second quarter before they would increase in the third quarter," Khelil told reporters.
U.S. light crude oil settled on Friday at around $36.5 per barrel, down more than $110 since July as the global economic downturn hit energy demand.
Commenting on the market situation, Khelil said: "The demand for oil had declined. It is clear that it (demand) would fall sharply in the second quarter".
"If prices fall, we may consider the possibility of reducing again the production," he added in reference to OPEC.
On the issue of OPEC members' observance of cuts decided earlier, Khelil said: "All OPEC countries had implemented the decision".
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Iran's OPEC governor said the cartel should reduce output further in order to bring balance to the oil market, state radio reported on Saturday.
Mohammad Ali Khatibi said the falling crude price showed that supply continued to exceed demand even though the Organization of the Petroleum Exporting Countries (OPEC) had already cut production by 4.2 million barrels per day, it said.
The report did not give any figures for how much Khatibi believed output should be reduced. Earlier this week, he said he still saw around 1 million bpd of extra oil in the market, the official IRNA news agency reported.
"In order to bring balance in the oil market, OPEC's oil output should be cut further," state radio quoted Khatibi as saying.
"Even subsequent to the recent cuts ... the oil price has maintained its downward trend and this shows that supply is still more than demand," he said.
Oil traded around $36.5 per barrel on Friday, up 3 percent, with short covering outweighing a gloomy demand outlook, but crude is still down more than $110 since mid-July as a global economic downturn hits energy demand.
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Sat Jan 17, 2009 9:26pm IST
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