Crude oil falls to $75

Opec debates if there is a need to build up stockpiles.

Crude oil pared early gains, after rising to within 50 cents of a record, as OPEC debated whether to leave production of crude unchanged or pump more oil to build up stockpiles before the coming winter.

Raising quotas by 500,000 barrels a day may be discussed at Tuesday's Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, said a delegate who refused to be identified.

Without more crude from OPEC, global stockpiles will fall an average of 1.2 million barrels a day next quarter, according to the consultants PVM Oil Associates.

"We have heard that the Saudis and United Arab Emirates are pushing for higher output" while others, especially Venezuela, oppose any increase, Ehsan Ul-Haq, the head of research for PVM, said in a telephone interview from Vienna. "Everybody is expecting lower stocks by the end of the year, and this is the main reason for the higher prices."

Crude oil for October delivery fell 3 cents to $77.46 at 12:24 p.m. London time in electronic trading on the New York Mercantile Exchange, after earlier gaining as much as 83 cents to $78.32. New York futures climbed to a record $78.77 on August 1.

Brent oil for October settlement fell 14 cents to $75.34 a barrel on the London-based ICE Futures exchange.

OPEC is split over whether to raise its self-imposed limits on output by 500,000 barrels a day. Another unidentified OPEC delegate said he doubted the members would agree to an increase. Saudi Arabia, OPEC's largest producer and most influential member, hasn't taken a position yet.

The group is concerned about world financial markets, where losses in the US from subprime mortgages are threatening to spread, said OPEC's secretary general and the former head of Libya's National Oil Corp, Abdalla el-Badri. Those losses have forced European and other central banks to inject more than $400 billion of emergency funds into credit markets.

A surprise drop in the US employment in August has heightened speculation credit problems are affecting the wider US economy.

OPEC members already pump more than their limits. The 10 members with quotas produced 26.71 million barrels a day last month, or about 900,000 barrels a day more than targeted, according to Bloomberg estimates.

"Later on in the year, there will be a greater need for OPEC oil," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna.