Bloomberg News - CAIRO: Ali al-Naimi, the Saudi Arabian oil minister, has said that inventories of crude oil are too high, indicating that OPEC, which supplies two out of every five barrels, should cut output.
Ministers of the Organization of Petroleum Exporting Countries will next meet in Nigeria on Dec. 14 to decide whether to cut production for a second time in two months. The group decided in October to reduce output by 1.2 million barrels a day starting Nov. 1, to limit a decline in oil prices from the record $78.40 a barrel in July to $63.43 at the end of last week.
"I agree that we have to take 100 million barrels out of the market," Naimi said in Cairo on Saturday, where there is a meeting of Arab oil ministers, without specifying how that should be done. OPEC's president, Edmund Daukoru, said last week that the group should cut output by at least 500,000 barrels a day.
Separately, Iran urged OPEC on Sunday to cut production again because of oversupply. Iran's OPEC governor, Hossein Kazempour Ardebili, told the state-run Islamic Republic News Agency that a cut should be 500,000 to one million barrels a day.
But among the world's biggest consumers of oil there is unease at the prospect of production cuts from the cartel. The U.S. energy secretary, Samuel Bodman, said last week that OPEC should refrain from another cut, because a colder-than-average winter in the United States may increase demand. And Guy Caruso, head of the U.S. Energy Information Administration, said that OPEC should wait until the full impact of the November cut was known.
John Hall, director of the British energy consultancy John Hall Associates, said: "OPEC is driven by price and the price now is too high, it's double what it was three years ago. I doubt that they would cut production."
Global oil inventories stand at 2.3 billion barrels, Naimi said, citing figures from the Organization for Economic Cooperation and Development. That is at least 100 million barrels more than a year earlier, he said.
Forecasts for colder weather in the United States have kept prices on the New York Mercantile Exchange above $60 a barrel since Nov. 27. Oil futures rose 7.1 percent this week and are 8.5 percent higher than a year ago.
Naimi was in Egypt for a one-day meeting of the Organization of Arab Petroleum Exporting Countries. Saudi Arabia, the world's top oil exporter, and six other Arab states — Algeria, Iraq, Kuwait, Libya, Qatar and the United Arab Emirates — are also part of OPEC, which has 11 members. The others are Iran, Venezuela, Nigeria and Indonesia.
Mexico names oil firm chief
The Mexican president-elect, Felipe Calderón, said Sunday that he had appointed Jesús Reyes Heroles, a former energy minister, as chief executive of Petróleos Mexicanos, the country's state-owned oil monopoly.
Reyes Heroles will take over Pemex, which provides the federal government with revenue from taxes equivalent to a third of national spending. He was announced along with 10 other appointments to federal agencies.
Calderón also announced that he kept Alfredo Elias Ayub as chief executive of the state-owned electricity company known as CFE.