Iran says it may ask for extra OPEC meeting

TEHRAN, Iran (Reuters) -- Iran may propose a further extraordinary meeting of OPEC member states in late February or early March if oil supplies continue to outstrip global demand, Iran's OPEC governor Hossein Kazempour Ardebili said on Tuesday.

Kazempour said OPEC may have to cut output by one million barrels per day (bpd) in the first quarter of 2001 if prices continue to drop.

MESSAGE BOARD Rising oil prices

"To maintain balance between supply and demand, OPEC may need to cut production by one million barrels a day in the first quarter of next year," he told Iranian oil researchers.

Kazempour said oil prices could dip below OPEC's preferred price band of $22-28 by the end of the first quarter, if Iraqi exports return to global markets without interruption.

"A proposal may be made in the (OPEC) meeting on January 17 to hold a meeting at the end of February or in early March to discuss production cuts, if Iraqi oil returns to the market," he said.

OPEC has already fixed an extraordinary meeting in January ahead of its next conference in March.

"In the second quarter of 2001 there may be a global surplus of 3.5 million bpd if Iraq returns to the markets.

"If OPEC does not decide to cut production, prices may fall below the minimum of the price range at the end of the first quarter," Kazempour said at the oil ministry's research institute.

He said crude prices were already beginning to show signs of weakness before supply problems caused by Iraq's bid for a surcharge per barrel outside the U.N. oil-for-food deal hit the market.

"A temporary decision by Iraq to stop supplies should not be a cause for concern," Kazempour said. "Past experience has shown that Iraq will not carry out its threat."

He said OPEC members' total spare capacity was less than Iraq's exports of 2.5 million bpd and statements made to the contrary were motivated by politics.

Kazempour said OPEC producers have added 3.7 million barrels per day to their production in 2000 and with non-OPEC production included, an extra 5.2 million bpd were supplied to the oil markets.

Hojatollah Ghanimifard, acting vice-president of the National Iranian Oil Company (NIOC), said on state television that OPEC should discuss cutting output at its January meeting.

"If OPEC ministers do not decide to cut production at the January meeting, then we will see more supply than demand and prices will fall," he said.

Kazempour said U.S. oil companies that had approached Iran to discuss a framework for future cooperation had voiced hope that a possible new Republican administration would remove obstacles to serious and practical cooperation.

"We expect changes," Kazempour told reporters at the end of his speech. "We believe the new administration will remove limitations which are hurting American oil companies and depriving them of free access to the market."

He said OPEC had started preliminary discussions on the necessity to create a new benchmark or to modify the current basket to make it more representative of the members's crudes.

"Nothing has been discussed seriously yet, but the basket is too light and too sweet," Kazempour said. "It does not represent the reality."

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