Saudi Arabia, Iran call for OPEC, non-OPEC producer meetings

Goal would be stabilization of market at $25 a barrel “in view of the global economic recession”

by The Associated Press

Oil giants Saudi Arabia and Iran called Oct. 17 for contacts among OPEC and non-OPEC producers to stabilize the market following a drastic fall in prices after the Sept. 11 terror attacks.

Saudi Oil Minister Ali Naimi and his visiting Iranian counterpart, Bijan Namdar Zangeneh, held a brief meeting in the Saudi capital Riyadh to discuss the situation, but did not take any decision on their production levels.

The ministers said contacts between the Organization of Petroleum Exporting Countries and non-OPEC producers were needed to bring stability to the oil market.

Naimi said OPEC’s objective remains maintaining stability and stabilizing the price level around $25 a barrel, which OPEC had managed to sustain most of the year before the Sept. 11 attacks on the United States.

“All oil producers agree that $25 a barrel is a fair price for all,” Naimi told reporters. “Any action that we may take will make sure that it won’t hinder world economic growth.”

Zangeneh said that in view of the global economic recession, joint measures to create stability in the oil market were necessary.

“OPEC must establish contacts with major producers outside of the organization and try to convince them of the necessity of creating suitable conditions in the oil market,” Zangeneh said.

Naimi declined to predict the size of a possible production cut in the short term, saying any suggested figure at present would not be accurate.

Naimi said there has been no U.S. pressure on OPEC not to cut output.

The value of OPEC’s basket of seven crude oils averaged $19.48 a barrel Oct. 16, down from $19.63 a barrel Oct. 15. Oct. 16 was the 17th consecutive trading day that the basket price was below $22 a barrel, the bottom end of OPEC’s target price band of $22-$28 a barrel.

OPEC members are next scheduled to meet Nov. 14.

Under its price band mechanism, the group had said it would raise output by 500,000 barrels a day if the basket price held above $28 a barrel for 20 consecutive trading days, or lower output by 500,000 barrels a day if the basket price stayed below $22 a barrel for 10 consecutive trading days.