GLOBAL OIL markets are oversupplied but the Organisation of Petroleum Exporting Countries (Opec) thinks it is too early for the group to act to halt a recent dip in prices as fallout from the euro-zone debt crisis sets in.

Opec secretary general Abdullah al-Badri said yesterday global oil markets were oversupplied, urging greater compliance among members of the group.

“We have a lot of crude oil on land and offshore,” Mr Badri told reporters on the sidelines of the Arab Energy conference in Doha.

“Opec already took action in December 2008 to reduce 4.2 million barrels ,” he told reporters. “We just have to abide by that . . . I am calling for more compliance.”

US crude oil futures settled at $75.11 a barrel on Friday, posting their largest weekly loss in almost a year and a half, as worries grew that the euro zone’s debt crisis might derail the global economic recovery. Crude also hit its lowest level since February 16th on Friday at $74.51, after going over $87 a barrel early in the week.

Mr Badri said the drop in oil prices was linked to speculative play. He said Opec had not set any target price when asked if $65 was a trigger for the group to act, a day after the Kuwaiti oil minister said prices at that level would force the group into action. “We don’t have a target price. I think it is because of the Greek problem,” Mr Badri said.

A senior Gulf Opec delegate said the impact of the Greek debt crisis on oil demand would be “limited” and that prices were unlikely to fall below $65 a barrel.

“I don’t expect the price to go to $65,” the delegate said. “The economic crisis in Europe will be limited and contained.”

Mr Badri said Opec will take a wait-and-see approach before taking action to stem the sharp drop in prices last week. “I’m not going to move because the price goes up and down, volatility is the name of the game,” he said.

Qatar oil minister Abdullah al-Attiyah also said the group was not yet planning an extraordinary meeting in response to the recent tumble in prices.

Opec is not scheduled to meet formally until October and has kept oil supply targets steady since late 2008.

Higher prices have encouraged some members to boost output informally, but core Gulf Arab members Saudi, the UAE and Kuwait have stuck to output restraints.

Mr Badri also said demand for oil was expected to grow by 900,000 barrels per day in 2010, led by rising appetite from Asia, in particular China and India. – (Reuters)