With hefty winter demand for heating fuels just around the corner, the world still needs all the crude oil that Opec can pump and the cartel should not overreact to lower oil prices by cutting production, US Energy Secretary Sam Bodman said.
Opec, which pumps about a third of the world's oil, will take one million barrels of oil a day off oversupplied world markets as soon as possible with its first output cut in more than two years, Opec officials said.
The move comes after a 23 per cent slide in US crude oil prices since July.
"We still need oil for sure. We still need all the oil we can get," Mr Bodman told Reuters in a telephone interview from New Mexico.
While US crude oil and heating oil inventories heading into the winter are well above normal levels, Mr Bodman said petroleum demand will still be strong in the cold months ahead and this is not the time for Opec to reduce available supplies.
"We are moving into the heating season. And of course, what I'm concerned about is our supplies," he said. "I would like to see the oil that they are now going to cut production of restored," he said.
Mr Bodman said he plans to drive that point home in likely discussions with Opec oil ministers ahead of any emergency meeting the cartel may hold before its next regularly scheduled meeting in December.
"I would imagine I would be in touch with them and have a conversation prior to the meeting, but there certainly is nothing scheduled at this time," he said.
Mr Bodman said he did not receive a call from any Opec official in advance about the organization's planned production cut. "Did I get a heads-up? No," he said.
Opec's president said six cartel members - top producer Saudi Arabia, Venezuela, Nigeria, Algeria, Libya and Kuwait - were already making voluntary cuts in their output and consultations were under way on how the group would curb the drop in oil prices.
Mr Bodman said Opec ministers are responding to the sharp decrease in oil prices over the last two months. "I understand their reaction," he said. "I'm sure what they're concerned about is an even more precipitous drop in prices."
Nonetheless, Mr Bodman said the current oil price of around $60 a barrel is still profitable for Opec and there is no need for the cartel to reduce output.
"The price is still close to all-time highs and I think it's very important that there not be an overreaction on the part of Opec," Mr Bodman said.
The price for US oil has fallen some 23 per cent since hitting a record of just above $78 a barrel in July. Following Mr Bodman's comments, oil fell briefly below $60 a barrel in trading on Thursday at the New York Mercantile Exchange.
The White House said that US President George W. Bush wants prices to fall further.
"Who would have thought we would think $58 or $59 (per barrel) oil was low?" White House economic adviser Al Hubbard said. "The President is not happy with $59 oil. He would like it to be significantly lower."
The drop in oil prices reflects the end of peak summer gasoline demand, but heating oil use will start picking up and Opec crude will be needed, Mr Bodman said. The United States is the world's biggest oil consumer, soaking up a fourth of the 85 million barrels used globally each day.
Separately, Mr Bodman said he was not worried that more affordable oil prices will slow the development of alternative energy sources, like ethanol, wind and solar power.
"I think these (oil) prices that are at or about $60 right now are certainly conducive to encouraging further investment in this (alternative energy) field," he said.