OPEC's Secretary General said on Sunday global oil markets were oversupplied, but it was too early to talk about the producer group taking action to halt the sharp price fall sparked by the euro zone debt crisis.
U.S. crude oil futures settled at $75.11 a barrel on Friday, posting their largest weekly loss in almost a year and a half, on concern Europe's problems could derail global economic recovery.
We have a lot of crude oil on land and offshore, OPEC Secretary General Abdullah al-Badri told reporters on the sidelines of an industry event in Doha. OPEC is overproducing, there is no doubt about it.
Badri urged greater compliance from OPEC producers with deep curbs in production agreed in 2008. The group agreed to cut output by 4.2 million barrels per day then, but higher prices have encouraged some members to informally boost output and the group is now delivering around half of the agreed cut.
Core Gulf Arab members Saudi, the UAE and Kuwait have been the most disciplined in holding to output restraints.
The oil minister of OPEC's top producer and most influential member Saudi Arabia said oil market fundamentals were balanced.
There is balance between supply and demand, Ali al-Naimi told reporters.
The drop in oil prices was linked to speculative play as the market was weighed down by uncertainty sparked by Greece's debt problems, Badri said.
OPEC had no price floor to trigger action, he added. On Saturday, Kuwait's oil minister said prices at $65 would force the group into action.
We don't have a target price. I think it (price drop) is because of the Greek problem, Badri said.
A senior Gulf OPEC delegate told Reuters the impact of the Greek debt crisis on oil demand would be limited and that prices were unlikely to slide to $65.
I don't expect the price to go to $65, the delegate said. The economic crisis in Europe will be limited and contained.
OPEC would take a wait to see if markets calmed before considering any action, Badri said.
I'm not going to move because the price goes up and down, volatility is the name of the game, he said.
The group had no plans to meet in response to the recent tumble in prices, Qatar's Oil Minister Abdullah al-Attiyah said.
OPEC was next scheduled to meet formally in October to discuss oil supply policy, which it has kept unchanged since late 2008.
Demand for oil was expected to grow by around 900,000 barrels per day in 2010, led by rising appetite from Asia, in particular China and India, Badri said in a presentation to an Arab energy conference.
The economic recovery is proceeding at a satisfactory pace. Oil demand is growing again and is expected to grow by 900,000 barrels per day in 2010, Badri said.
Turmoil in Europe and the possibility that China would tighten its fiscal policy to slow inflation were among the main downside risks to oil demand growth, the International Energy Agency's Executive Director Nobuo Tanaka told Reuters in an interview on Sunday.
(Additional reporting by Regan E. Doherty; Writing by Luke Pachymuthu and Raissa Kasolowsky; Editing by Erica Billingham and Gunna Dickson)