Opec is ready to cut production by a significant amount when it meets later this month in Algeria, prompted by high oil inventories, the group’s secretary-general Abdullah al-Badri said.
"We are all geared towards a cut in Algeria," Reuters quoted Badri telling a news conference in Tehran, two days after the Opec decided at a meeting in Cairo to delay a decision on a new supply reduction.
"The market is oversupplied because we are seeing stocks as very high, about 55 to 56 days," he told reporters on the sidelines of an energy conference in the Iranian capital.
Asked whether there would be a decision to reduce output at the group’s 17 December meeting in Oran, Algeria, Badri said: "There will be action there … It will be a good amount, a good quantity."
He did not give a figure.
Badri said he believed it would be in the benefit of producers both inside and outside Opec to support prices, which have tumbled by more than 60% in less than five months.
He said he had met Russian officials in October to discuss the issue: "Maybe after Algeria we will talk to them directly, maybe the president (of Opec) or myself will go there and try to convince them that they should participate with us."
Delegates said most members, including Gulf producers led by Saudi Arabia, saw the need to slice another 1 million to 1.5 million barrels per day off output. But for that to happen, delegates said, Riyadh wants proof that all fellow members are meeting their part of existing curbs.
Opec members’ level of compliance was more than 80%, Badri said, saying this figure was based on a forecast.
"Let us wait until December so we don’t have to shoot in the dark," he said when asked why Opec did not remove more supplies from the market at its meeting in the Egyptian capital.
Oil stocks in the OECD rose to 56 days worth of forward demand last month – the top end of the five-year end norm for this time of the year – and have been a worry for Opec, which uses them as a gauge of oversupply.
Asked what kind of stock levels Opec would like to see, Badri said it was aiming at 52 days: "I think we are looking for 52 days. This is the average for the last five years."
Badri said he believed an oil price of $75 per barrel would be "reasonable", echoing comments by Saudi Arabia, the world’s largest crude exporter.
Saudi Arabia on Saturday cited $75 a barrel as a "fair price" for oil in order to keep the more expensive new projects at the margins of world supply on track.