BAGHDAD – OPEC members are worried by the drop in the price of oil to around $90 a barrel, Iraq's oil minister told Reuters in an interview on Monday.
Hussain al-Shahristani said that the drop in oil prices to an eight-month low was due to the global economic crisis and not a change in supply. Iraq believes the fair price of oil is about $100, he added.
“Definitely there is worry. When the prices are so volatile, like rising to $140 and then dropping to below $90, it worries everybody,” he said.
“Now what is happening in the prices ... is because of the economic crisis in the industrial world.”
U.S. light crude for November delivery fell by $3.84 a barrel to $90.04 by 1424 GMT, its fourth day of losses.
It touched a session low of $88.89, its lowest since early February. Prices have dropped by nearly 40 percent from a peak of $147.27 on July 11.
London Brent crude (LCOc1), the European benchmark, was down $3.86 at $86.39 a barrel.
“We in OPEC are committed to a policy of providing crude depending on the need of the market. If that falls, we should curtail production – we will not allow production to exceed demand in a way that would negatively affect crude prices. Also if demand increases, we will increase production to provide enough in the market,” he said.
The Organization of the Petroleum Exporting Countries pumps two in every five barrels of oil supplied to world markets.
Shahristani's comments come against the backdrop of a worsening global financial crisis. U.S. and European governments are trying to underpin the financial sector, but this has so far failed to reassure investors.
The United States has passed a $700 billion financial rescue plan, while European governments have offered guarantees to savers, as well as coming to the aid of troubled banks.
But European shares fell more than 5 percent and the Dow Jones industrial average was down nearly 3 percent, following on from heavy losses in Asian markets.
“In Iraq, we think the fair price is $100. When it was $140, it was too high and could have had negative effects on some economies ... but the fall to below $100 will put pressure on the budgets to countries like Iraq which needs lots of money for reconstruction after years of wars,” he said.
(Reporting by Mariam Karouny; editing by Alex Lawler/James Jukwey)
