Iran official: 'There's too much oil on the market'

VIENNA -- Iran's oil minister suggested Saturday that a weekend OPEC meeting should decide to cut back on crude output, adding his voice to those in the organization who think supply has outstripped demand.

"There is too much oil on the market," Gholam Hossein Nozari told reporters on the eve of a ministerial meeting of the 12-nation Organization of the Petroleum Exporting Countries.

Other influential OPEC members have also said the group should reduce production.

Still their statements have left open whether they want to lower output quotas or if they favor a solution less likely to impact on the struggling global economy by simply seeking to end overproduction by some nations above levels allotted to them.

OPEC cuts agreed on since September were meant to take a daily 4.2 million barrels off the market. But there is general agreement that the 10 members of the group under production quotas are still overshooting their joint target level of just under 25 million barrels by about 800,000 barrels a day.

There is no question the ministers want to bolster prices. While prices are off their low of around $30 just a few weeks ago, a barrel of crude still fetches less than a third of what it did over the summer. That is well below the break-even point for producing nations, which could affect not only their national budgets, but oil production as well.

But as the world grapples with the worst recession in decades, OPEC ministers realize they have to tread lightly.

Cheap crude has been one of the few bright spots in a world economy reeling from the financial meltdown that has led to the deepest and most stubborn global recession in decades. While a substantial output cut could cause prices to spike and increase OPEC revenues, it could prolong economic woes in the U.S. and other major oil consumers.

And such a reduction could not only deepen the perception that OPEC is out for profits, whatever the global costs. It could ultimately backfire in real terms, by further depressing demand and driving down prices.