OPEC expects oil prices to fall soon

OPEC expects oil prices to fall soon

JAKARTA (Reuters): OPEC Secretary-General Rilwanu Lukman said on Tuesday he expected surging oil prices to fall very soon, reiterating that the cartel would pump more crude if necessary.

He said OPEC would not hesitate to respond if prices -- which have been hitting 10-year highs of some $36 to $37 per barrel -- did not ease before the body's ministerial meeting in November.

"We expect prices to go down very soon," Lukman told Reuters on his arrival in the Indonesian capital Jakarta, where he will attend an oil conference.

"If prices remain high, we don't need a meeting, we won't wait for the meeting. We'll act."

"We've agreed that if prices remain above that level ($22-$28) for the number of days we have stipulated, more oil would be made available," he added.

Saudi Arabian Oil Minister Ali al-Naimi has already said further supply could be added before OPEC's scheduled November ministerial meeting if sky-high prices made it necessary.

OPEC can add more oil under its price stability mechanism, which would bring an extra 500,000 barrels per day (bpd) if prices continue above $28 for 20 consecutive working days after October 1.

Lukman added he backed al-Naimi's view that $25 per barrel was a fair price.

He declined to predict where prices would go from here, but added that some extra oil was already creeping into the market.

OPEC had about two million bpd spare capacity, Lukman added.

OPEC on September 10 agreed to raise production by an extra 800,000 bpd, its third output rise this year. While the hike has failed to contain prices, al-Naimi has said that crude oil supplies were now ample and that stocks would build.

Prices have increased recently as rising tensions between Baghdad and Washington fueled traders' fears that Iraq could shut off its crucial oil supplies this winter in the run-up to November's U.S. presidential election.

Saudi Arabia and other OPEC producers are under growing pressure from importing nations to release more supply as the latter battle inflation fears and consumer protests.