Tuesday, Jun 12, 2012

(This story was originally published Monday)

By Hassan Hafidh

VIENNA--Iraq's oil minister, Abdul Kareem Luaiby, said Monday that the recent sharp fall in the price of crude oil is due to an oversupplied market.

Speaking in his capacity as president of the Organization of Petroleum Exporting Countries ahead of its meeting in Vienna later this week, Mr. Luaiby said it is "pretty clear" that there is an oversupply situation in world oil markets.

The price of crude oil traded on the New York Mercantile Exchange have fallen toward $80 a barrel over the past month, from as high as $110 a barrel earlier in the year, due to concerns that a slowing global economy would dent demand.

Mr. Luaiby said "most economists and analysts believe that an oil price ranging between $100 and $120 a barrel is reasonable for both consumers and producers."

But he also denied Iraq was overproducing to make up for Iranian production being lost to sanctions.

"Those who say that Iraq has compensated for Iranian oil production are mistaken," he said, speaking as Iraqi oil minister. "We have no big increase in production to compensate for Iran."

Mr. Luaiby also rejected the need to bring Iraq into the OPEC quota system, or about setting new quotas for the organization's members.

"Iraq was deprived from exporting its oil for many years because of wars and [United Nations] sanctions and these factors are well known by OPEC," he said.

"It is perhaps rather difficult to speak about a quota for each [OPEC] member at this meeting," he said. "There are factors beyond the control of the organization such as problems happening with different countries. When these problems are solved then the organization can set new quota for each member."

Luaiby refused to comment on what OPEC would decide on at this week's meeting, saying any decision will rely on the data that will be submitted by its economic committee.

Write to Hassan Hafidh at hassan.hafidh@dowjones.com

(END) Dow Jones Newswires

12-06-12 0337GMT