Algiers (Platts)--17Nov2008

OPEC may have to wait until a December meeting in Algeria to decide if
further action is needed to balance markets because ministers will not have
all the data needed to adopt "a realistic decision" when they hold emergency
talks in Cairo on November 29, OPEC president Chakib Khelil said Sunday.

"We will have the information we need after the month of November and it
may be in early December that we will have precise data," Khelil told
reporters when asked if OPEC members were complying with an October 24
agreement to cut supply by 1.5 million b/d starting November 1.

Khelil, speaking on the sidelines of an energy conference in Algiers,
would not say whether he agreed with a call by Iran's OPEC governor, Mohammad
Ali Khatibi, on the need for a further supply reduction of 1-1.5 million b/d.

"Members are free to make declarations if they so desire. At the moment
whatever is to be agreed will depend on a consensus decision by the
conference," said Khelil, who on Friday called for emergency consultations in
Cairo on November 29 as oil prices slid to a 22-month low.

"For the time being, we are going to have consultations because the data
that we will have at that time will not be enough to allow us to make a
realistic decision," Khelil said, adding: "It is not a question of saying we
will cut just for the sake of saying so."

There was no point of talking about further supply cuts if members have
not adhered to their production targets after two agreements in September and
October to trim oversupply and cut production, he said.

MARKET REACTION IN DECEMBER

"It will be in December when we expect to see a reaction from the market,
when there will be real information, which will have an impact on the market,"
Khelil, said.

Asked if this meant OPEC might wait until a December 17 meeting in the
Algerian city of Oran to take action, Khelil replied: "I cannot tell you what
will be agreed in Oran because that is when we will have the necessary
information that will allow us to take the right decision."

Khelil's latest remarks appeared a departure from statements made on
Saturday to the Algerian newspaper El Moudjahid where he hinted at possible
action on supply in Cairo and later in Oran if market conditions warrant it.

"It is very probable that [at] the next meeting in Cairo of the Arab oil
producers (OAPEC), where all the members will be present, we can take some
decisions in that forum if we consider that the conditions warrant it," Khelil
told the Algerian daily El Moudjahid.

IRAN SAYS $70/B MINIMUM PRICE

Iran, which was among the more vocal advocates of a production cut at the
last emergency OPEC meeting in Vienna, wants OPEC to make another deep cut in
supply to defend an oil price floor of $70/barrel, its OPEC governor said.

IRAN WANTS

"It would better if a decision is taken for another decrease of one
million to 1.5 million b/d so that a balance between supply and demand is
reached," state television's web site quoted Khatibi as saying.

"Of course, this proposal is favorable if the world financial crisis does
not deepen and also OPEC members respect their commitment to decrease their
production quotas," Khatibi said.

"The downward trend of oil price and increase in the stockpiles of big
industrial countries indicate oversupply." he added.

Khelil said in the newspaper interview that the 13-member group had an
opportunity between now and December to "find remedies that will restore
stability to prices."

The run of extraordinary meetings has come in response to demand concerns
resulting from the global economic crisis that have seen prices plummet from a
high of $147.27/b in July to around $55 last week.

PRICES SET TO RISE

Khelil said he did not think the economic recession to continue beyond
the first half of next year and he expected oil prices to move higher once
normal demand patterns returned.

"Moreover, I do not think this recession will last beyond next year, it
is understood and very probable that things will right themselves in the first
six months of the coming year," Khelil said.

"Prices are going to recover and stabilize themselves at the average
level of the years 2002 to 2007, which is to say around $60 to $70/b," he
added without giving a time-frame, saying this depended on how quickly the
global economy would turn around and stimulate demand.

"No one knows any more how to make projections; [it] all demand depends
on the world economy, which is in recession..."

Khatibi, who later blamed falling oil prices on rising non-OPEC oil
production, said it was important for OPEC producers to comply with the agreed
production targets if the latest agreement to cut supply was to be effective.

The minimum oil price acceptable to OPEC is $70/barrel. A fall below that
level would endanger future investments and production, Khatibi said in the
television interview.

IRAN BLAMES NON-OPEC

Khatibi also called on non-OPEC members to join the organization's effort
to balance oil supply and demand. "We need non-OPEC members to cooperate with
OPEC... and decrease their production somewhat. If they increase production,
it will just counteract OPEC's measures."

He told the official Iranian news agency IRNA that the market was
oversupplied because non-OPEC producers had raised their production, rendering
OPEC's supply reductions ineffective.

"Evidence shows that additional oil production by non-OPEC members has
neutralized OPEC's measures," he said.

"The solution for oil producers under the current circumstances is to
supply only as much oil as is needed by the market because any oversupply will
serve only to weaken oil prices," said Khatibi.
-- staff reports, newsdesk@platts.com