Some OPEC members float idea of oil supply cut

Police officers stand guard on the rooftop of Vienna's OPEC headquarters in Vienna in this September 20, 2005 file photo. OPEC may need to intervene to balance the oil market if prices fall further, Nigeria said on Wednesday, making it the latest country in the exporters' group to float the prospect of supply curbs.

LAGOS/ANTALYA, Turkey (Reuters) - OPEC may need to intervene to balance the oil market if prices fall further, Nigeria said on Wednesday, making it the latest country in the exporters' group to float the prospect of supply curbs.

Nigeria joins Libya, Iran and Iraq, fellow members of the Organization of the Petroleum Exporting Countries, in expressing concern this week about the impact of the financial crisis on the oil market.

"There may be a need to intervene to balance the market, if the price slide seemingly predicted on demand and over-supply continues," Nigerian Oil Minister Odein Ajumogobia told Reuters.

Oil prices hit a 10-month low of $86.05 a barrel on Wednesday as expectations mounted that the credit crisis would slow global demand for oil, the main source of income for OPEC members.

The group's 13 members pump about two in every five barrels of oil. On a visit to Turkey, Iraq's oil minister said OPEC may need to consider cutting output if the price of crude remains below $90.

"If there are any future declines below $90, we will need to consider taking action, Iraqi Oil Minister Hussain al-Shahristani told Reuters on the sidelines of a conference in the Turkish coastal city Antalya.

Crude prices rallied only briefly on Wednesday after the U.S. Federal Reserve led a global round of interest rate cuts to try to bolster the world economy.

U.S. crude was down $2.50 at $87.56 a barrel by 1320 GMT. It has fallen rapidly from a record high of $147.27 in July.

SAUDI VIEW KEY

Saudi Arabia, OPEC's largest producer and most influential member, has yet to comment publicly on oil's latest decline or the prospect of a further supply cut.

OPEC's second-largest producer, Iran, on Tuesday voiced concern about the impact on oil demand of the credit crisis, and Libya raised the prospect of OPEC meeting before its next scheduled conference on Dec. 17 in Algeria.

"For oil-producing countries, not only are prices going down, but also their money in the banks, their investments, are threatened by this financial crisis," Libya's top OPEC official, Shokri Ghanem, told Reuters.

OPEC was pumping far above its official production limit earlier this year as oil prices surged, largely because of a unilateral supply increase from Saudi Arabia.

An output reduction agreed by OPEC at its last meeting, on Sept. 9-10 in Vienna, has so far failed to stem the price fall.

It decided to comply strictly with its formal output target, a move OPEC said meant the group would cut supply by about 500,000 barrels per day, about 1.5 percent of its production in August.

An OPEC source suggested the group was unlikely to cut output in December unless the price of crude produced by its members fell below $80. OPEC's reference crude oil basket price, comprising 13 crudes from member countries, stood just above that threshold at $80.04 on Tuesday.

"The price is still reasonable," the source told Reuters. "If it stays where it is then OPEC will stick to the output levels decided at the last meeting. I think if it falls below $80, OPEC will do more."

(Additional reporting by Simon Webb)