updated 11/6/2006 9:51:37 AM ET 2006-11-06T14:51:37

OPEC may need to cut oil production further this year to deal with an oversupply in the market, the cartel’s president said Monday.

“When we meet in December we will take a view on it but it looks as if some further mopping up will be necessary,” OPEC chief Edmund Daukoru told reporters. “The market is clearly oversupplied, clearly oversupplied.”

Regarding OPEC’s decision last month to cut production effective Nov. 1, Daukoru said that the effects of the reduced output have yet to be seen, but would be soon.

Daukoru, who is also Nigeria’s oil minister, said it will take “probably into the middle of the month before you will start to believe us.”

The Organization of Petroleum Exporting Countries decided last month at a meeting in Qatar to curb supplies by 1.2 million barrels a day. It plans to meet again in December in Nigeria.

He added that OPEC as an organization and Nigeria as an OPEC member were implementing the cuts. Nigeria is the world’s eighth-biggest oil exporter.

Oil prices have tumbled from a mid-July peak above $78 a barrel. On Monday, light, sweet crude for December delivery dropped 42 cents to $58.72 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

“I don’t know where it should be, but the current price is low,” Daukoru said.

Daukoru, who is visiting South Korea to meet government officials and attend an oil industry conference, also said he couldn’t say how much any potential further production cut might be.

Daukoru also said he couldn’t say how much any potential further cut might be.

Regarding the seizure by unidentified gunmen on Thursday of a Briton and an American working for the Norwegian company Petroleum Geo-Services on Nigeria’s southern coast, Daukoru said he was confident the victims would soon be safely released.

“Naturally we are concerned that the hostages might come to unintended harm. But in incident after incident, upon payment of a small amount they let the hostages go,” he said. “This one is no different.”

Since the beginning of this year, various militant groups in Nigeria have attacked oil pipelines and taken expatriate oil workers hostage in violence that has cut about 25 percent of the country’s usual crude output of about 2.5 million barrels daily.

The militants say they are fighting on behalf of an impoverished population for a greater share of wealth from oil companies and the federal government, which apportions the revenues among Nigeria’s 36 states.

Daukoru repeated his oft-stated view that the unrest in the region is not political in nature but rather is related to a lack of development, which he said the government is working to address.

He said “the problems you see now will recede into nothing as the development effort gains ground.”

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com