Oil falls below $80 a barrel for first time in year

OIL CRISIS: OPEC has called an emergency meeting as oil prices slip below $80 a barrel for the first time in a year. (Getty Images)

Iran's oil minister called for market stability on Saturday, a day after crude prices fell more than 10 percent, and warned that consumers would ultimately also suffer if prices did not return to a "logical level."

Oil Minister Gholamhossein Nozari was asked what action he believed the Organisation of the Petroleum Exporting Countries (OPEC) should take at an emergency meeting scheduled for Nov. 18 in Vienna and whether a cut in output would restore stability.

"We think that this meeting will take good decisions. The aim OPEC pursues is establishing stability in the market," he told reporters without spelling out whether he believed the cartel should reduce crude production.

Oil prices touched 13-month lows on Friday in a global flight from risk amid concerns of a worldwide recession and further signs of slumping energy demand.

The price fall has caused some OPEC members to call for a cut in production levels, and the group will discuss the impact of the global financial crisis on the oil market at their meeting next month in the Austrian capital.

British Prime Minister Gordon Brown said on Friday it would be "wrong" for OPEC to cut production just as oil prices are falling.

But Nozari, oil minister of the world's fourth-largest crude producer, said existing prices would hurt investment in the sector and as a result also those buying oil.

"Therefore it seems fundamental decisions should be taken," he said on the sidelines of an oil conference in the Iranian capital, without elaborating.

"If the oil prices do not return to a logical level it will be the consumers who will incur loss over the long run and providing energy security will be endangered in the future," Nozari said.

Slumping demand in the United States and other developed economies has sent oil prices off their peak above $147 a barrel in July, after surging consumption in emerging markets such as China sent commodities on a six-year rally.

On Friday, U.S. crude plunged $8.89 to settle at $77.70 a barrel, the lowest levels since Sept. 10, 2007, and down 17 percent from last Friday's settlement. London Brent crude settled down $8.57 at $74.09 a barrel.

"Studies indicate that the current critical problem has to do with demand in the market," Nozari said. "We should be after market stability, meaning that the stability of the market is important both for the producer and the consumer."

"The principal problem now is the global economic situation and it seems fundamental thought should be put in that direction to find a solution," he said. (Reuters)

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