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Mon 15 Dec 2008 12:40 PM

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Iran says OPEC should cut oil supply

Iran's call for output reduction of 1.5 million to 2 million barrels per day reiterated as oil stocks rise.

Iran's OPEC governor said on Monday oil stocks were rising because of oversupply and reiterated Iran's call for OPEC to cut 1.5 million to 2 million barrels per day (bpd) from its output to bring stocks down.

Iranian Oil Minister Gholamhossein Nozari said in remarks published on Sunday that the Islamic Republic, the world's fourth biggest oil producer, was calling for a cut of up to 2 million bpd at the OPEC meeting in Algeria on Wednesday.

The Organisation of the Petroleum Exporting Countries is expected to cut output at the meeting to try to shore up prices that have tumbled about $100 since a peak in July. Benchmark US crude was trading around $46 on Monday.

"The market is oversupplied and stocks are going up. The oil... stock increased from 52 days to 56 days. The producers should try to bring stock to 52 days," Iran's OPEC governor, Mohammad Ali Khatibi, told Iran's English-language Press TV.

Iran has consistently said the oil market is oversupplied.

"The producers should reduce the exports between 1.5 to 2 million bpd to bring stability to the market," Khatibi said, adding that otherwise the "situation will be worse" if the winter ends and stocks have risen.

Asked if OPEC would back Iran's proposal, Khatibi said:

"I think there is a good atmosphere to bring stability back to the market. Everybody expects from OPEC and maybe some non-OPEC countries to cooperate with OPEC for reducing a certain amount because at the moment the market is oversupplied.

"The additional barrels should be removed from the market if we want to have a good price," he added.

Nozari said in remarks published on Saturday that what he called the "real price" for oil was more than $100 a barrel.

Saudi Arabia has said $75 a barrel was a fair price, comments echoed by an Iranian official this month. Other OPEC officials have said members states needed $70 to $80 a barrel. (Reuters)

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