VIENNA, 12 December 2002 — Members of OPEC debated yesterday how to rein in overproduction and avert a slide in crude prices if demand slackens as expected next spring.

Delegates of the Organization of Petroleum Exporting Countries fear that some members might undermine the organization’s goal of keeping prices at around $25 a barrel.

Prices could tumble to below $20 a barrel without a cut in output, Saudi Arabian Minister of Petroleum and Mineral Resources Ali Al-Naimi told reporters as OPEC oil ministers gathered for talks in the Austrian capital.

“We are very worried,” said Obaid ibn Saif Al-Nasseri, oil minister for the United Arab Emirates, when he arrived at a hotel in Vienna.

The delegates were to meet formally today at OPEC headquarters in Vienna, Austria, to determine production for the coming months.

OPEC was also worried about a national strike in member state Venezuela, the world’s fifth-largest crude exporter. The strike has paralyzed oil shipments from the country.

January contracts of light, sweet US crude dropped 8 cents a barrel to $27.66 in early trading in New York, after jumping 55 cents Tuesday. Contracts of North Sea Brent crude for January delivery rose 3 cents a barrel to $26.45 in London.

OPEC, which produces about one-third of the world’s oil, has an output target of 21.7 million barrels a day.

Most OPEC members agree they need to raise the output ceiling, Naimi said Tuesday in London.

The increase should take effect Jan. 1, Naimi said, ahead of an expected decrease in demand for crude in the spring, when sales of heating oil decline with the warmer weather.

The Paris-based International Energy Agency argued there is no need for OPEC to cut output now. The agency is a watchdog for the Organization of Economic Cooperation and Development, a group that includes the world’s richest oil-importing nations.

“We’re heading into winter, prices are still strong and to tighten the market now would be premature,” said Klaus Rehaag, editor of the agency’s monthly oil market report.

In addition, the strike in Venezuela has caused oil production in that country to fall by 1.5 million barrels a day, Rehaag said.

The strike has compounded market uncertainty about the impact a US-led military attack on Iraq might have on Iraqi crude production.

Global production of crude rose by 185,000 barrels a day to 78.64 million barrels in November, the latest IEA report said yesterday. Even so, inventories were tight, and prices haven’t fallen dramatically, agency analyst Antoine Halff said.

Qatar Energy and Industry Minister Abdullah ibn Hamad Al-Attiyah said yesterday that OPEC must act against overproduction.

“We overproduce without a doubt,” Al Attiyah said, adding that “not to do something against it is not an option.”

Meanwhile, Kuwaiti Oil Minister Adel Khalid Al-Sabeeh said the 11 members of the OPEC hoped at a meeting in Vienna today “to find a solution with a good signal for the market.”

“We will see what’s exactly the need of the market and we will make a reasonable proposal for the market,” Al-Sabeeh said.

Algerian Oil Minister Chakib Khelil said there is “no consensus on anything”, adding “maybe tomorrow.” (Agencies)