Energy chief says Opec worries unfounded

The head of the International Energy Agency has said Opec is wrong to be worried about the recent fall in oil prices and warned that there was very little spare production or refinery capacity in the world.

"I am surprised Opec is worried about the level of prices," IEA Executive Director Claude Mandil said in an interview with La Tribune newspaper released ahead of publication today.

"Of course, (prices) have fallen significantly over the past month, but they had reached completely absurd levels," he added.

Ministers from the Organisation of the Petroleum Exporting Countries are due to meet on October 19 to decide on production cuts aimed at halting the slide in prices, which have fallen by 20 per cent since July to below US$60 ($91.99) per barrel.

However, Mandil said he wanted prices to fall further.

"I am not making any forecast over prices, but I hope they continue to fall because there's the margin," he said.

Mandil told La Tribune that Opec had always maintained its aim was to insure that the market was well supplied, and said he saw no need for them to change this policy.

If there were major geopolitical crises or exceptionally severe weather conditions "world production does not have the flexibility to compensate for a loss of supplies," Mandil said.

He said the world's refineries were also working at full tilt, adding that the world would have to wait until 2010 to see more flexibility in production and refinery capacity.

- REUTERS