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OPEC at one over output; Iran bids for sec-gen post

Written by: Staff
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VIENNA, Sept 10 (Reuters) OPEC ministers said on Sunday they were unlikely to tamper with an output policy that is steering oil prices downwards, easing pressure on consumer economies and yet bringing in billions of dollars for producers.

But ahead of their meeting on Monday, divisions emerged over which country should provide the next OPEC secretary general.

Iran, at odds with the United Nations Security Council over its uranium enrichment programme, has staked a claim to the largely administrative post but others in OPEC are opposed.

The Organization of the Petroleum Exporting Countries, supplier of a third of the world's oil, has worked hard in recent years to convince consumer nations that its decisions are commercially, not politically, motivated.

Delegates say Iran's dispute with the Security Council rules OPEC's second biggest producer out of a position it has sought but not held since the 1979 Islamic Revolution.

''Iran's right has been denied in the past years due to some political reasons,'' Iran's OPEC governor Hossein Kazempour Ardebili told Iranian students news agency ISNA.

That brought a forthright response from one OPEC delegate.

''You cannot have an Iranian at this time holding talks with Europe and the United States. We need someone where there are no objections internationally and who is also highly qualified,'' the delegate told Reuters.

There has been behind-the-scenes disagreement over the job for 3 years and OPEC has managed with a series of acting secretary generals, the latest from Nigeria. Iran appears determined to force the issue at Monday's meeting.

PRICE IN DECLINE Oil has fallen sharply from its .40 a barrel record high of July 14, when Israeli strikes on Lebanon led to fears of a wider Middle East conflict. But at , it is still up this year and three times the price at the start of 2002.

For more than a year, OPEC has been pumping at or near its fastest rate for 25 years to fill consumers' tanks and guard against price shocks. The organization has kept its official ceiling at 28 million barrels per day since July 2005, although it has adjusted supplies according to fluctuating demand.

''OPEC in general and Saudi Arabia in particular have done their best to supply the world with what it needs energy-wise so you see inventories today are very comfortable, prices are coming down and I hope no one is concerned about a shortage of supply,'' said Saudi Oil Minister Ali Al-Naimi on Saturday.

Officials from Algeria, Libya, United Arab Emirates, Iran and Kuwait agreed OPEC would most likely keep the current limit.

Only Nigeria has expressed concern at the decline in prices.

The group is mindful that the Atlantic hurricane season still has several weeks to run and U.S. Gulf of Mexico oil output has yet to recover fully from last year's storms.

''It is an unlikely situation that prices will fall or that there will be a glut. Right now we are approaching the fourth quarter when demand starts to pick up,'' an OPEC delegate said.

Iran's dispute with the United Nations Security Council also has potential to drive prices higher. The United States favours sanctions against the world's fourth biggest oil exporter.

Surging oil prices boosted the value of OPEC's crude oil exports by 45 percent to a record 3 billion last year.

But there are signs that economic activity is easing in top consumer the United States and the second biggest consumer China has raised lending rates to try to cool its economy.

OPEC's economists are forecasting demand for OPEC oil will drop 800,000 barrels per day to an average 28.3 million barrels per day in 2007 as new non-OPEC production comes onstream.

''The price is affecting consumption but not in negative terms.

Demand is growing but more slowly,'' the delegate said.

REUTERS DKS PM1917

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