Iran sees possible oil over-supply in 2009: report

TEHRAN (Reuters) – Continued OPEC production at current levels would lead to over-supply of its crude in the first half of 2009, causing prices to drop, Iran’s OPEC governor was quoted as saying on Sunday.

Mohammad Ali Khatibi, speaking two days before OPEC ministers meet in Vienna, also told the official IRNA news agency that oil prices could not fall below $80 per barrel as this was the production cost cited for some new fields.

The price of oil has tumbled from a record above $147 in July to below $107 on Friday. Khatibi said a falling price would not benefit consumers either as it would affect investment.

Khatibi, who last week said OPEC may need to cut supplies by as much as 1.5 million barrels per day (bpd) to balance global markets by early next year, said demand for the group’s oil was forecast at about 31 million bpd for the first six months of next year.

Reuters