NEW DELHI, Oct 30: Leading Opec officials said on Wednesday they were happy with oil prices, shrugging off rampant quota-busting which the cartel admits is running 10 per cent over official limits.

“Supply of oil is fine, stocks are fine,” Opec Secretary-General Alvaro Silva told reporters, painting a rosy picture for the group ahead of its December 12 meeting.

Quota-cheating of at least 2.35 million barrels a day over the group’s 21.7 million bpd formal production ceiling did not upset the view, he said.

“We have a committee that takes care of these issues and very continuously reviews them at each conference. To conclude, we are not worried about that,” Silva told reporters on the sidelines of a global climate conference.

Oil prices have fallen steeply in recent weeks, weighed down by rising Opec output and the perception that the United States is prepared to give United Nations diplomacy another chance in its campaign against Iraqi leader Saddam Hussein.

Saudi Oil Minister Ali al-Naimi, also at the New Delhi conference, said he was satisfied with prices.

“I will say the current price levels are okay because they are within the Opec band,” Ali al-Naimi, oil minister of Opec’s leading producer Saudi Arabia, told reporters

Opec’s reference basket of seven crudes stood at $25.35 a barrel on Tuesday, almost at the mid-point of the cartel’s target band of $22 to $28 a barrel.

“The market fundamentals are fine and provisions for winter season have been made and everything is working as normal. The only thing we can’t predict are the consequences of war,” Silva said.

Naimi would not be drawn on the outcome of the group’s December conference.

“It is too early to say what Opec will do, it is still one-and-a-half months before the meeting,” Naimi said.

Many Opec oil ministers oppose raising official output limits unless consuming countries face a genuine shortage of supply, rather than high prices lifted by fears of a war.

But others are worried that rampant cheating has hurt Opec’ credibility on world markets.

They would like Opec to legitimise some of the extra production by raising official quotas, without adding any more actual supply.

—Reuters