OPEC ready to act to move oil prices below $28: Report

OPEC will activate a mechanism to keep oil prices within the cartel's USD.22 to USD.28 a barrel target band if prices remain higher on world markets, Saudi Oil Minister Ali al-Nuaimi pledged Saturday as reported by AFP news agency.

Nuaimi's remarks, along with those from other Arab members of the Organization of Petroleum Exporting Countries (OPEC) meeting here, tended to reassure a market nervous over events in Iraq and Venezuela.

"We are committed to a fair price," the oil minister of the world's largest producer of crude told journalists on the sidelines of the Arab oil ministers' meeting in Cairo.

"We have a mechanism to be triggered when it is necessary. It is not yet in place. And should the price continue (to stay above USD.28), the price band mechanism will be implemented like we have done in the past," he said.

OPEC agreed to a price band mechanism in March 2000 under which the cartel would raise output by 500,000 barrels per day if prices remain above the range of USD.22 to USD.28 for more than 20 consecutive trading days.

By the same token, OPEC would cut output by the same quantity if prices fell below USD.22 for 10 consecutive days.

Qatari Oil Minister Abdullah bin Hamad al-Attiyah promised that the 11-member cartel would review a new 23 million barrels per day production ceiling it set for its members earlier this month if there were a war in Iraq or a shortage.

"In case of war or in case of any shortage, OPEC will have to take another decision," he said ahead of the opening of today's meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC). (*)