Minister of Energy Mohammed Bin Dhaen al-Hamli was also quoted by UAE's state news agency as saying that crude oil stockpiles in heavily consuming countries are within recent average levels.
Al-Hamli added that decisions on production levels are based on whether the market is well supplied and the recent fall in prices shows that the earlier rise was "too high, too fast."
The comments came on the eve of a meeting of OPEC oil ministers who will decide whether to reduce production or keep it steady. Oil prices have fallen nearly 30 percent from their highs of almost $150 a barrel, prompting general concern among OPEC's 13 members.
OPEC President Chakib Khelil seemed to support, at least in principle, the hawkish stance that current oil supplies are enough to satisfy global demand.
"Definitely, there is plenty of oil on the market, " Khelil said upon arriving in Vienna, forecasting that by the end of 2008 or early 2009, daily oil output would exceed demand by between 500,000 and 1.5 million barrels.
Asked what OPEC's likely decision would be regarding output, Khelil said "all options are open."
Just as top OPEC officials have done in the past, Khelil blamed speculators for large fluctuations in oil prices, rather than a scarcity of crude.
"What we are seeing now is that the inverse relation between the U.S. dollar and the oil price is verified," Khelil said. "When [the oil price] went up, the dollar was going down and now that the dollar is strengthening, the oil price is going down."
Iran, the group's No. 2 producer, has been the most vocal proponent of tightening the oil spigots.
"We believe the market is oversupplied," Iran's oil minister, Gholam Hossein Nozari, told reporters, adding the ministers planned to make a decision on what to do about production after their review Tuesday.
Echoing those comments, Shokri Ghanem, the chairman of Libya's National Oil, told The Associated Press: "There is a glut in the market that warrants creating order."
Asked how discipline should be re-established, he said that OPEC members producing above assigned quotas should be urged to curb output in line with those limits.
"There is a lot of oil in the market, much more than demand," he said.
No one is predicting much of a cutback at Tuesday's meeting—if any at all. Still, such a move would not even have been thought of with oil prices setting record after record back in July.
But the bull run appears to have paused, if not ended, which means a new look at options for the meeting at OPEC's Vienna headquarters.
Since crude surged to a record $147.27 a barrel on July 11, it has tumbled by over $40, or more than 27 percent. Back then, OPEC's main concern was pushing back against arguments from the U.S. and other key consumers that an output increase was needed to end rocketing prices. Oil ministers insisted there was adequate supply to meet demand, and blamed speculators and a weak U.S. dollar for crude's stellar rise.
But now, the greenback has strengthened, world demand has decreased due to creaky economies, traders' appetites for commodities have cooled—and suddenly the market appears to have turned bearish.
In Europe, light, sweet crude for October delivery was up $1.07 to $107.30 in electronic trading on the New York Mercantile Exchange, as Hurricane Ike threatened oil and gas facilities in and around the Gulf of Mexico. On Friday, however, the contract fell by $1.66 to settle at $106.23, a five-month low.
The downward spiral has led Iran to suggest that it is time to reduce output from the nearly 30.5 million barrels a day being pumped last month by the organization's members.
Not far behind is Venezuela. While moderating recent demands for immediate output cuts, Venezuelan Oil Minister Rafael Ramirez has drawn the line at $100 per barrel of oil. Anything below that should serve as a wake-up call for OPEC to tighten the spigots, he says—sentiment that is shared by other OPEC members.
Still, a major cutback is unlikely without Saudi compliance, and the Saudis—de-facto OPEC policy setters who are now producing nearly a third of total OPEC output—have given no hint they favor that option. Saudi Oil Minister Ali Naimi has instead talked about a floor of $80 as the red line for action.
OPEC has reason to be cautious.
Despite their precipitous fall, prices remain 14 percent higher this year than in 2007, and a barrel of benchmark crude still fetches four times what it did five years ago.
Any OPEC move Tuesday to pare back output would result in a howl of protest from the U.S. and other major consumers, and give a larger platform to Republican presidential candidate John McCain and Barack Obama, his Democratic counterpart, to call for reduced dependence on foreign oil. (Slideshow: 10 States for Cheapest Gas)
Additionally, OPEC understands that high prices drive down demand and will likely try to find a balance between high profits and a price that the market can accept. That could mean the ministers will compromise between doing nothing—thereby chancing a further erosion in prices—and slashing boldly—thereby risking skyrocketing prices and an ensuing fallback in demand.
That middle way would mean agreeing to pare away at overproduction without reducing the overall output quota of 27.3 million barrels a day set in November for the 12 OPEC members under production limits.
Kuwait: No Need to Cut Production
Kuwait's oil minister says there is no need for OPEC to cut production, despite falling crude prices.
Mohammed Abdullah Al-Aleem's comments come on the eve of a meeting of oil ministers from the Organization of Oil Exporting Countries who will decide whether to reduce production or keep it at current levels.
He is part of an OPEC committee whose recommendations could play in OPEC's final decision on what to do about output.
Al-Aleem says that "for the time being ... there is no need to cut production," partly because of worries about slowing global economic growth, But at the same time, he argued Monday that supply was outpacing demand.