OPEC facing output cut choice at key Vienna meeting

The OPEC oil exporters' cartel appears set this weekend to either trim output or encourage its 12 member nations to fully comply with recent deep cuts that were aimed at boosting weak oil prices.

Saudi Arabian Oil Minister Ali Ibrahim al-Nuaimi said yesterday the market was "not yet" balanced, indicating that supply was greater than demand ahead of today's crucial OPEC output meeting.

"Is the market balanced between supply and demand? Not yet," he told reporters upon his arrival in the Austrian capital, but also admitted that crude inventories were coming down.

However, he added: "Global oil demand in 2009 is significantly less than 2008."

Saudi Arabia is the biggest oil exporter in the Organisation of Petroleum Exporting Countries (OPEC), which pumps 40 per cent of crude oil supplies, and the most influential member.

Asked whether there will be another cut, al-Nuaimi replied: "We will tell you tomorrow."

Hardline members Iran and Venezuela argued yesterday that the market was oversupplied, implying they could seek lower production today. But they did not specify whether they would call for a fresh cut.

OPEC is meanwhile facing calls to fully enforce last year's deep cuts that were targeted at boosting prices amid a widening global recession.

The price of oil has slumped by more than $100 since rocketing to record high points above $147 per barrel last July. In turn, that has slashed precious crude revenues for OPEC.

Al-Nuaimi also added yesterday that compliance was "very good" among OPEC nations after they agreed late last year on cuts to reduce output by 4.2 million barrels per day.

"Compliance is very good... Now it's over 80 per cent. It can be better," al-Nuaimi said.

"We like to see compliance as high as possible."

Quizzed about the level of crude oil inventories in OECD countries, he responded: "It's coming down. And it will come down in due time."