Opec stands ready to cut production again this year if oil prices continue to fall, its secretary-general said yesterday.

“Opec will not hesitate to act to stabilise the price,” Abdullah al-Badri said during a visit to London. “We are watching the market very carefully and we have another meeting in December in Algeria.”

The remarks came three days after the cartel of 13 producer countries agreed to greatly reduce production by 1.5 million barrels a day in an attempt to support crude prices. Since July prices have more than halved, delighting consumers but alarming the governments of Opec member states, which rely heavily on oil revenues.

Mr al-Badri said that the rapid slide in oil prices, which continued falling yesterday to a 17-month low of under $62 a barrel, was having a destabilising effect and was undermining investment in the global oil industry.

“There must be an incentive for producers,” he said. “When we have low prices, there will be no new [exploration] activities, no new investment, no training, no oil services companies and no new technology. This low price will affect investment and future supply. We fear that a lot of [new oil production] projects will be cancelled or delayed.”

He said that Opec was investing in 120 new oil projects worth a total of $160 billion (£102 billion) that would raise its overall production capacity by fivemillion barrels a day by 2012.

Mr al-Badri, a former Libyan deputy prime minister who served as chairman of the country's national oil company after a stint at Esso, dismissed Gordon Brown's criticism of Opec's decision to cut oil production as hypocritical. He pointed out that Western governments could easily provide relief for hard-pressed consumers struggling with high prices at the pumps by simply cutting fuel taxes: “He just wants to blame somebody and he is blaming Opec.”

He said that Opec, which produces 40 per cent of the world's oil, had decided to cut production because there was an oversupply in the market. The cartel produces 32.2 million barrels a day but expects demand of only 31.1million barrels next year.

He denied that Opec had a specific target price in mind, saying only that $147 a barrel was too high, while current prices of between $60 and $70 a barrel were too low.

“We just want to balance the market,” he said. He blamed speculators for the spike in prices this year to a high of $147 a barrel on July 11. Hedge funds were using oil as an asset class, he said. “The paper market was out of control. Nobody was controlling it. We want to see a price that is driven by fundamentals not by speculators,” he said.

Mr al-Badri said he was not concerned about the risk that high oil prices could ultimately harm Opec by undermining demand.

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