Oil: Opec calls for action over price falls

Oil fell toward US$61 on Tuesday on robust US inventories ahead of the winter heating season, but producer group Opec said the price slide from peaks this summer had gone far enough.

US crude CLc1 fell 44 cents to US$61.01 per barrel, reversing Monday's rebound from a six-month low below US$60. London Brent LCOc1 slipped 68 cents to US$60.12.

Oil prices have had their steepest decline since the Gulf War in 1991, falling from July's peak of US$78.40 a barrel, on easing Middle East tensions, ample fuel stocks and slowing US economic growth.

Opec President Edmund Daukoru told Reuters on Tuesday the slide in prices was harming investment and that "something needs to be done."

"We are already talking among ourselves in the Opec fold. The price is very low, and it's not good for investors," he said after a meeting with diplomats in Abuja, the capital of Nigeria.

The Organisation of Petroleum Exporting Countries, which pumps a third of the world's oil, expects the global oil supply to be a "colossal" 1.8 million barrels per day above demand by the second quarter of next year, he added.

"The general sentiment is that, if prices fall further, Opec might decide to come in and cut its quota," said Andrew Harrington, an industry analyst at ANZ.

"Given the language that some Opec members are using, the market is interpreting that a price below US$60 would be a trigger point for the group to act," he added.

Opec has avoided setting a target oil price to defend. Saudi Oil Minister Ali al-Naimi, who steers the policy of the world's biggest exporter, said last week, when prices were above US$62 a barrel, that prices were "reasonable."

Adding downward pressure to prices, BP said it was increasing production at its Prudhoe Bay oil field in Alaska and was on track to hit 400,000 barrels per day of production by the weekend -- just 50,000 bpd below full capacity.

Output from the field, the largest in the United States, was cut sharply in early August after BP found a spill from a severely rusted line.

US oil inventories are already brimming.

A Reuters poll ahead of Wednesday's US government data found that US stocks of distillates, which include heating fuel, were projected to rise by 2.3 million barrels last week. Inventories already stand at their highest level since January 1999.

Crude oil supplies were forecast to decline by 1.7 million barrels last week, while petrol stocks edged higher by 500,000 barrels, according to the survey.

- REUTERS