VIENNA (Reuters) – OPEC is pumping more oil than the market can absorb, Iraqi Oil Minister Hussain al-Shahristani said on Saturday.
With demand falling OPEC will have little option but to cut further, he told reporters, but did not make clear whether OPEC’s meeting on Sunday should set new output targets or just improve compliance with existing curbs.
“There is a decline in demand. OPEC cannot keep over-producing,” Shahristani told reporters.
“If demand is going to decline, then OPEC would have no choice but to reduce its production levels. We have no customers for our current production levels.”
Shahristani also said the current oil price was too low, which discouraged bringing online the most expensive new oil supplies.
“The marginal cost is between $50 and $70. If we don’t support these producers, we will have a decline in production in the long run,” he said.
Iraq is the only member of the 12-nation producer group which is not subject to output restraints.
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