OPEC may cut output at June 11 meet

OPEC can be expected to agree to slash production at a ministerial meeting in Qatar on June 11 to avoid a price collapse, OPEC President Abdullah bin Hamad al-Attiyah told AFP on Monday, strongly defending Iraq's position within the oil cartel.

"The cut will be the topic that will be very carefully" discussed, Attiyah said, noting that confusion about Iraq's return to the market and inventories made it difficult to set a figure.

"I believe maybe we will cut it because we believe that in all earnestness there will be more oil in the market and the market cannot accept it.

"We don't want to see this huge floating of oil, collecting dramatically and putting pressure on the oil price. We don't want to see ourselves in the position of 1999," when prices collapsed to 10 dollars a barrel on oversupply.

"Personally I believe 25 dollars is a very reasonable price," said Attiyah, who is also Qatar's energy minister, reiterating the 11-member cartel's target rate.

"We will discuss the market situation very carefully. We would like to be sure that we are on the safe side... avoiding any crisis."

Iraq's return to the market after the US-led war is predicted to come around the end of June, but Attiyah said it was difficult to read.

The Organisation of Petroleum Exporting Countries would "also treat very carefully the re-entry of Iraq to the market," at the June talks in Doha.

"It's really very difficult," he stressed, recalling conflicting reports of the exact timing and how quickly Iraq would reach pre-war daily average production of 2.7 million barrels per day (bpd).

"This also we have to study very carefully," he said. "The analysis is very confused now about when Iraq is coming." He took strong issue with US suggestions that Baghdad may pull out of OPEC.

"I heard a lot of rumours saying maybe Iraq will withdraw," Attiyah said in his office at Qatar's energy ministry.