OPEC's Iran governor said Sunday the organization may take two separate actions in the coming month and that he hopes non-OPEC oil producers will help the organization's efforts as early as a Nov. 29 meeting.
The statements come as the Organization of Petroleum Exporting Countries, or OPEC, this week said it would convene an early meeting on Nov. 29 in Cairo, sparking speculation of a new production cut as it tries to respond to falling oil prices amidst a global economic crisis.
Speaking by phone to Dow Jones Newswires, Iran OPEC governor Muhammad Ali Khatibi said "I believe it is very difficult to achieve our goal (to stabilize markets) by one decision" because "the economic recession is moving very fast" and so is demand reduction.
When asked if OPEC could decide a new output reduction output in Cairo, Khatibi said "maybe in one decision, you cannot balance the market...The adjustment could be dynamic, you should make decisions step by step," he said.
The statements suggests Iran does not rule out two staged cuts, one on Nov. 29 and the other on Dec. 17, when OPEC gathers for a regular meeting in Oran, Algeria. But Khatibi declined to say what decision Iran could support, saying it would depend on the market situation at the time of the meetings.
OPEC already decided to reduce its output by a total of 2 million barrels day in two separate decisions in September and October.
Asked if he though the latest, 1.5 million reduction agreed to in October would be implemented by the time OPEC meets on Nov. 29, Khatibi said. "We cannot judge.... We will wait and see the figures at the end of November." He said Iran, whose share of the cut is 199,000 barrels a day, "is fully cooperating" with the OPEC decision and started to reduce this amount.
The OPEC governor also said "I hope in Cairo, we will have (support from non-OPEC oil producers) but we are not sure."
"There are several actions to talk to non-OPEC and persuade them for more cooperation with OPEC. Supply should be adjusted by OPEC and non-OPEC," he said, citing a recent trip by OPEC's secretary general Abdallah El-Badri to Russia.
Renewed assertiveness by OPEC comes as oil prices have dropped to about $55 a barrel - down 60% from a peak four months ago of $147.
Asked what he thought the right price should be for a barrel of oil, Khatibi said "If you collect all comments (on) what is acceptable for players, producers and consumers... you are arrive at the band of $70 to $100."
He warned that oil prices would rebound in the long-term because of the underinvestment created by today's lower prices. "If you have money in your pocket, you don't spend it in oil industry. The activity in upstream (exploration and production) is going to stop," he said.
"But when the economic situation is back to normal and you need more oil, you cannot add new capacity overnight," Khatibi added.