OPEC: High and volatile prices may be new norm

VIENNA -- High and volatile crude costs may signal ``a new price era," a senior OPEC official said yesterday, insisting that the 11-nation cartel is doing all it can to bring prices down to more reasonable levels.

The comments came as oil prices fell almost 3 percent yesterday, dropping below $64 a barrel as worldwide demand and supply threats ease. After a seven-day sell-off, crude futures are at their lowest since late March.

Mohammed Barkindo, acting secretary-general of the Organization of Petroleum Exporting Countries, defended the group's Monday decision to keep its production target steady at 28 million barrels a day.

OPEC made clear that it would keep close tabs on prices, which have recently fallen to five-month lows, and consider a cut in output quotas this year.

Barkindo said a key reason was high commercial inventories, which he said totaled 1.2 billion barrels -- the largest stocks since 1997. Although crude has dropped by about $12 a barrel since midsummer, prices overall have increased fourfold since 2001, he said.

``It is the volatility that should most concern the industry," Barkindo told a post-meeting conference in Vienna, cautioning that the fluctuations could herald ``a new price era."

``OPEC has been doing as much as it can to restore prices to reasonable levels," he said.

The cartel produces about 40 percent of the world's crude.

Light sweet crude for October delivery fell $1.85 to settle at $63.76 a barrel on the New York Mercantile Exchange -- the lowest closing price for front-month futures since finishing at $61.77 a barrel on March 22.