Iran fears oil prices could drop dramatically next year if there are excess supplies, Iranian petroleum minister Bijan Namdar Zangeneh said here Saturday on the eve of an OPEC meeting.
OPEC ministers would discuss the market situation Sunday, which would be a critical factor in deciding any output cut in the future, he told reporters shortly after arriving in Vienna.
Asked whether he believed crude oil prices could collapse if there was a supply glut next year, Zangeneh said: "We think it is possible. It is one of our concerns."
But the question of whether the 11-nation Organization of Petroleum Exporting Countries should cut supplies would depend on a study of the overall situation, he added.
"It depends on the market situation," the Iranian minister said. "We are studying the market fundamentals carefully."
Zangeneh said he supported OPEC's loosely-applied price-band mechanism, which led the group to raise supply by 500,000 barrels at the end of October, following three increases already agreed earlier this year.
"We support the price band mechanism. We think it has done well," he told reporters.
The mechanism triggers an output increase if prices remain over $28 a barrel for 20 working days or a production cut if they persist below $22 for 10 consecutive working days.
Brent crude for December delivery fetched $32.0 a barrel in London at the close on Friday.
If prices remain where they are, a further production rise would be triggered at the end of this month unless OPEC ministers decided to override it, as they have done in the past.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)
