Iran Views Oil under $100 pb as Unacceptable

TEHRAN (FNA)- Iranian Oil Minister Gholam Hossein Nozari said any price lower than 100 dollars for a barrel of crude oil is “unsuitable” for both producers and consumers.

“An oil price of less than 100 dollars is unsuitable for anyone, either for producers or for consumers,” Nozari told reporters on the sidelines of a gas export conference in Tehran on Saturday.

“Unfortunately despite decrease in oil prices we have not seen any signs of a decrease in the costs” of oil production, he added.

Asked for a forecast on prices, he said there had recently been such wild fluctuations that “five to 10 dollars up or down cannot be analyzed.”

Nozari blamed the current economic crisis in the United States and its effect on Europe for the fluctuations.

“I think the main reason for the volatility is because of international economic crisis,” Nozari said.

The Iranian oil minister had previously said $100 was the lowest appropriate price for a barrel of crude.

Anything below that level would slow investment in high-cost projects to boost oil output, which would hurt consumers in the long run, Iran’s OPEC Governor Mohammad Ali Khatibi has said.

Oil prices closed little changed on Friday after the US Congress approved a 700-billion-dollar bailout plan for the financial sector.

New York’s main contract, light sweet crude for November delivery, closed nine cents lower at 93.88 dollars a barrel. It finished the week down 13 dollars.

Prices have plummeted from record highs above 147 dollars in July.

There have been worries that the slowing global economy would reduce demand for crude, and data published on Friday underscored that.

Government data showed that the struggling US economy lost 159,000 jobs in September as the weight of the housing collapse and credit crunch hit a broad swath of industries.

In September, Iran successfully called on the Organization of Petroleum Exporting Countries, of which it is the second-largest producer, to cut output.

Nozari also warned that “currently there is oversupply of oil in the market” in the amount of 400,000 barrels per day.

He said that, “if the market is controlled in the first quarter of 2009 as the result of OPEC’s September decision,” then the situation is fine.

“If not, and based on the figure of the current 400,000 barrels per day in oversupply, (the figure) will reach 1.2 million bpd.”

He also said that the cartel is not planning any other meeting except the one scheduled for December 17 in Oran, Algeria.