VIENNA, Austria There is too much crude on global oil markets, senior oil officials from Iran and Libya said Monday, and added that OPEC was reviewing supply levels.
Energy officials representing members of the Organization of the Petroleum Exporting Countries arrived in Vienna where they will discuss production levels and global demand.
Oil prices have fallen 26 percent from their highs of $147 a barrel and Iran, the group's No. 2 producer, has become one of the most vocal proponent of tightening the oil spigots.
"We believe the market is oversupplied," Gholam Hossein Nozari, Iran's oil minister, told reporters, adding the ministers planned to make a decision on production levels after a review Tuesday.
Shokri Ghanem, the chairman of Libya's National Oil Corp, told The Associated Press, "There is a glut in the market that warrants creating order."
He said OPEC members producing above assigned quotas should be urged to curb output in line with those limits.
Saudi Arabia, the dominant OPEC member, has boosted production by 250,000 barrels per day after repeated requests from Western nations, and direct pleas from President Bush.
Libya's Ghanem now says the market is oversupplied.
"There is a lot of oil in the market, much more than demand," Ghanem said.
Nigeria's junior minister for petroleum, Odein Ajumogobia, indicated he had not yet taken a position on output.
"I really haven't made up my mind," Ajumogobia said upon his arrival in Vienna. Asked whether OPEC might maintain current output levels, Ajumogobia said he had "no idea."
If production is cut, most industry experts expect it will be very small, though it would come two months after crude prices hit all time highs above $147.
Since crude surged to a record $147.27 a barrel on July 11, it has tumbled more than $40. Over the summer, OPEC was resisting calls by the U.S. and other Western nations for more oil. Oil ministers, however, blamed speculators and a weak U.S. dollar for crude's rise.
The greenback has since strengthened, global economies have slowed and investor appetite for commodities has cooled. The crude market has begun to look terribly bearish.
In Europe, light, sweet crude for October delivery rose $1.90, nearly 2 percent, to $108.13 on the New York Mercantile Exchange, as Hurricane Ike threatened oil and gas facilities in and around the Gulf of Mexico. The contract fell Friday by $1.66 to settle at $106.23, a five-month low.
The downward spiral has led Iran to suggest that it is time to reduce output from the nearly 30.5 million barrels a day being pumped last month by the organization's members.
Not far behind is Venezuela. While moderating recent demands for immediate output cuts, Venezuelan Oil Minister Rafael Ramirez has drawn the line at $100 per barrel of oil. Anything below that should serve as a wake-up call for OPEC to tighten the spigots, he says sentiment that is shared by other OPEC members.
Still, a major cutback is unlikely without Saudi compliance, and the Saudis de-facto OPEC policy setters who are now producing nearly a third of total OPEC output have given no hint they favor that option. Saudi Oil Minister Ali Naimi has instead talked about a floor of $80 as the red line for action.
OPEC has reason to be cautious.
Despite their precipitous fall, prices remain 14 percent higher this year than in 2007, and a barrel of benchmark crude still fetches four times what it did five years ago.
Any OPEC move Tuesday to pare back output would result in a howl of protest from the U.S. and other major consumers, and give a larger platform to Republican presidential candidate John McCain and Barack Obama, his Democratic counterpart, to call for reduced dependence on foreign oil.
Additionally, OPEC understands that high prices drive down demand and will likely try to find a balance between high profits and a price that the market can accept.
In a forecast last month, OPEC predicted that the world's forecast appetite for oil for this year overall will have fallen by 30,000 barrels a day and noted that world demand growth next year will be "the lowest since 2002."
Such factors have led some experts to predict OPEC would opt for no change.
"The ministers will hold the status quo (although) there is going to be the usual jawboning from the usual suspects" for a cutback, says trader and analyst Stephen Schork. Even now, "oil is by no means cheap and that is certainly adding a lot of pressure to the (world's) economies the smarter ones, the Saudis, the Qataris the Kuwaitis are aware of this."
Others think that OPEC, which accounts for about 40 percent of world oil production, will compromise between doing nothing thereby chancing a further erosion in prices and slashing boldly thereby risking skyrocketing prices and an ensuing fallback in demand.That middle way would mean agreeing to pare away at overproduction without reducing the overall output quota of 27.3 million barrels a day set in November for the 12 OPEC members under production limits.
Associated Press writer George Jahn contributed to this report from Vienna.