Oil slips below $67, OPEC steady

With oil prices tumbling to five-month lows, the 11-nation Organization of Petroleum Exporting Countries (OPEC) is likely to hold its oil production steady for now. Key members of the 11-nation alliance said they see no reason to tighten or loosen their taps after meeting in Vienna on Monday. The members will pay closer attention to world stockpiles of crude as prices face a downfall and forecasts for oil demand growth fade.

OPEC President Edmund Daukoru calls the pipeline problems and political unrest that give global markets the jitters as ‘the fear factors’ and maintains that the 11-nation alliance will keep a hard look at them.

Crude dipped below $67 a barrel on Friday. Prices have plunged since light sweet crude hit a record $78.40 in mid-July. Analysts say a $10 drop in the price leads to a 25-cent drop in prices at the gas pump.

OPEC supplies 40 percent of the world's crude and has maintained its production target at 28 million barrels a day since July 2005. Now it is determined to get a better feel for whether prices will stabilize or keep on falling and to break out of what Daukoru called the "autopilot" mode.

But OPEC could not keep its attention away from the tumbling prices and Iran’s oil minister hinted that the Northern Hemisphere might see a cut in output targets before winter. "We’re going to discuss it," he said, adding that he doesn’t want to see crude fall below $60 a barrel. The cartel might start tightening its taps if crude dips below $60.

The oil ministers from Qatar and Venezuela, Abdullah bin Hamad al-Attiyah and Rafael Ramirez, said that a production cut may be on the table at the next meeting.

Ali Al-Naimi, Saudi Arabia’s oil minister said, “This is a cyclical business. It’s not the first time prices go up or prices go down. Market fundamentals are very sound. We are beginning to see a slight decrease in economic growth, very slight.” But he added, “It is nothing alarming.”

“Previously, we didn't want to disturb the global situation because it was too uncertain,'' Daukoru, who is also Nigeria's oil minister, told reporters in Vienna. “The hurricane season isn't that bad. It's time to see whether we need a good, fresh outlook. We have to look very, very carefully at what's going on with prices."

OPEC is next scheduled to meet in December in Nigeria. But “if there is deterioration in the global economy and prices fall quickly, then we will need a meeting before December,” said Chakib Khelil, Algeria’s oil minister and his view was echoed by other delegates.