OPEC is expected to cut production at a ministerial meeting in Qatar on June 11th to avoid a price collapse, OPEC President Abdullah bin Hamad al-Attiyah said this morning.
"The cut will be the topic that will be very carefully" discussed, Mr Attiyah said, noting that confusion about Iraq's return to the market and inventories made it difficult to set a figure.
"I believe maybe we will cut it because we believe that in all earnestness there will be more oil in the market and the market cannot accept it.
"We don't want to see this huge floating of oil, collecting dramatically and putting pressure on the oil price. We don't want to see ourselves in the position of 1999," when prices collapsed to 10 dollars a barrel on oversupply.
"Personally I believe 25 dollars is a very reasonable price," said Mr Attiyah, who is also Qatar's energy minister, reiterating the 11-member cartel's target rate.
"We will discuss the market situation very carefully. We would like to be sure that we are on the safe side ... avoiding any crisis."
Iraq's return to the market after the US-led war is predicted to come around the end of June, but Mr Attiyah said it was difficult to read.
AFP