By SPENCER SWARTZ
LONDON—The decline in crude-oil prices has caught the attention of OPEC members, raising questions about whether the cartel will pull back on production. In the short term, it appears unlikely the tumble in crude will spark action anytime soon.
Prices have fallen almost 20% since touching about $87 a barrel in April, as fears mounted that Europe's sovereign-debt woes may ricochet to other parts of the world, taking oil demand with it. Midday Friday in New York, crude oil for July delivery, the new front-month contract, was up 10 cents, or 0.1%, to $70.90 a barrel on the New York Mercantile Exchange.
For the first time in many months, oil is trading near an informal preference among many ministers of the Organization of Petroleum Exporting Countries. They prefer to see crude prices trade no lower than $70 a barrel. A level of between $70 and $80 a barrel is seen as helpful for promoting energy investment but without hitting consumers' pockets too hard.
In addition to facing headwinds from a stronger dollar, which makes oil more expensive for foreign buyers, crude is contending with plentiful supplies and weak demand.
Crude output by OPEC rose 40,000 barrels a day in April to 29.03 million barrels, while estimates for this year's global oil demand were revised down by 220,000 barrels a day, the International Energy Agency said last week.
One senior OPEC delegate said the cartel is watching the price fluctuate, but is confident that U.S. oil demand is showing improvement, and the growth market of Asia still appears healthy. This person said any talk of an emergency meeting of the 12-nation producer group was "very premature," echoing other OPEC ministers' sentiment in recent days.
At the moment, there isn't much OPEC can do about the sliding price except to enforce existing production cuts that the group has had in place since late 2008. OPEC members, whose crude satisfies four in every 10 barrels consumed globally daily, are pumping about two million barrels a day above the group's formal production target, as members try to procure more oil revenue.
This week, Angola's oil minister was quoted in Portugal as saying that the group could meet before its scheduled October session if prices made an "abrupt fall." Qatar's oil minister said in recent days that OPEC hadn't yet discussed the recent decline, and he reiterated support for $70-a-barrel oil.
Write to Spencer Swartz at spencer.swartz@dowjones.com
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