Calling global oil markets oversupplied, OPEC president Chakib Khelil said Wednesday the group has to consider a production cut, though he declined to say of what magnitude.
Speaking to reporters as he arrived for an emergency meeting of the Organization of Petroleum Exporting Countries here on Friday, Khelil said sluggish demand was already leaving the group unable to sell some of its crude.
"Some of us are not able to sell crude, he said. "Some excess of crude has not been able to get sold by the market."
His comments echo those from the cartel in recent days expressing growing alarm about the slide in oil prices. Benchmark crude futures fell $5 a barrel in New York on Wednesday, slumping alongside stock markets and pressured by significant gains in U.S. petroleum stockpiles.
Light, sweet crude for December delivery - the new front month - recently traded as low as $66.80 a barrel on the New York Mercantile Exchange, the cheapest price since June 14, 2007. It was down $5.38, or 7.5%. Brent crude on the ICE Futures exchange fell $4.75 to $64.97 a barrel.
Crude oil has declined by more than half since cresting above $145 a barrel in July. Buyers have bailed out of the commodity as analysts reel in demand growth forecasts on prospects of a global economic slowdown.
Khelil said ministers will take into account the situation of consuming countries affected by the ongoing world financial crisis. At the same time, he said the group has to weigh the needs of oil producer nations at its hastily-arranged meeting.
"Also, we don't like our countries, some of which have been affected, to be even more affected by the low price," said Khelil, who is also Algeria's oil minister.
"The question of reduction has to be discussed," Khelil said without saying how much the group would have to take off the market.
Analysts expect OPEC members to cut by at least 1 million barrels a day. Iran's oil minister said the cartel could decrease output by as much as 2.5 million barrels a day, if world demand falls by 8% to 10%. OPEC, which supplies 40% of the world's oil, pumped 32.3 million barrels of crude a day in September, according to the International Energy Agency.
"The decision has to take into account, that if the decision goes to far, it will affect countries which are already affected by the economic crisis," said Khelil, who is also Algeria's oil minister. "If it doesn't go too far, if it goes too low, it will affect the producers, who might end up being in that category of people who are affected by the financial crisis."
Asked if he expected non-OPEC members to join any cut, Khelil said, "I hope they will contribute," adding, "I am sure" they will.
He declined to specify if Russia was one country he expected to join the effort.
Many analysts say that even if OPEC agrees to pull in production as expected, it will do little to stop downward momentum of oil prices. Just as investors feverishly bid crude above $147 in July, they are now stampeding out of oil and other commodities amid broad fears about a deep global recession.