• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 16 hours Satellite Moons to Replace Streetlamps?!
  • 1 day US top CEO's are spending their own money on the midterm elections
  • 10 hours EU to Splash Billions on Battery Factories
  • 14 hours U.S. Shale Oil Debt: Deep the Denial
  • 22 hours The Balkans Are Coming Apart at the Seams Again
  • 6 hours Owning stocks long-term low risk?
  • 10 hours The Dirt on Clean Electric Cars
  • 2 days OPEC Is Struggling To Deliver On Increased Output Pledge
  • 1 day Uber IPO Proposals Value Company at $120 Billion
  • 24 hours 47 Oil & Gas Projects Expected to Start in SE Asia between 2018 & 2025
  • 1 day A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 2 days U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 5 hours The end of "King Coal" in the Wales
Alt Text

Goldman Sachs: Oil Unlikely To Reach $100

Goldman Sachs’ chief commodities analyst…

Alt Text

Oil Experts Divided As Iran Sanctions Loom

The world’s top oil trading…

Alt Text

Oil Prices Subdued, But For How Long?

Oil prices may have closed…

Andy Tully

Andy Tully

Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com

More Info

Trending Discussions

OPEC Denies Price War, Shows Faith In Markets

OPEC Denies Price War, Shows Faith In Markets

OPEC Secretary-General Abdullah al-Badri is urging the cartel’s 12 members to maintain production and exploration despite a lower demand for oil.

Yet al-Badri told an energy conference in Dubai on Dec. 14 that he is as baffled as anyone why the price of oil has dropped by so much in recent days. “The fundamentals should not lead to this dramatic reduction [in price],” Badri said, according to his Arabic-English interpreter.

As for sustained exploration and production during a period of low demand, al-Badri said such a strategy would prevent a shortage of supply once demand eventually is restored. He said oil customers, particularly the United States, will need OPEC’s oil for years to come.

Related: Iran Leader Says US Not Only Target Of Suspected Saudi Oil Price War

It was the first time that al-Badri had commented on the state of oil prices since Nov. 27, when OPEC, led by Saudi Arabia, refused to cut production levels from 30 million barrels a day in the face of an oil glut and its attendant price drop.

It also was the first comment by anyone in OPEC about the cartel’s own forecast, issued Dec. 9, showing that next year’s demand for oil will decline to 28.9 million barrels per day, 280,000 barrels lower than the previous month’s forecast and the lowest in 12 years. Reports by other energy monitoring agencies show similar drops in demand.

Al-Badri said he and his colleagues were searching for a price point that would serve both producers and their customers, but had yet to settle on a figure. Meantime, OPEC isn’t due to hold its next meeting on production levels until June 5. Given the current price chaos, he was asked, does the cartel need to hold an emergency meeting before then? He smiled and replied, “I don’t know.”

The cause of the glut and the price drop was a production increase of about 6 million barrels per day in countries that aren’t OPEC members as well as speculation by oil traders, al-Badri said. But he expressed faith that prices eventually will stabilize on their own. He said he expects prices to stabilize in mid-2015, giving the cartel a better idea about “the required measures” it should take.

Related: Oil Wars: Why OPEC Will Win

Al-Badri also dismissed reports that OPEC’s decision to keep production high was part of a price war against oil-producing countries that aren’t members of the cartel. “Some people say this decision was directed at the United States and shale oil,” he said. “All of this is incorrect. Some also say it was directed at Iran and Russia. This also is incorrect.”

At the same conference in Dubai, Suhail al-Mazrouei, the energy minister for the United Arab Emirates, said he believed OPEC wouldn’t shift its position on production levels even if oil prices, now hovering around $60 per barrel, plunge to as low as $40 per barrel. And al-Mazrouei said OPEC won’t even consider such a session for at least three months.

“We are not going to change our minds because the prices went to $60 or to $40,” al-Mazrouei told Bloomberg News on the sidelines of the Dubai gathering. And he agreed with al-Badri that oil prices will find their own level. “We’re not targeting a price… The market will stabilize itself without OPEC’s intervention… We need to wait for at least a quarter to consider an emergency meeting,” he said.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment
  • Xam Takorian on December 16 2014 said:
    You could have used a nicer picture of the guy, not one that makes him look like psycho terrorist. USA is more to blame than OPEC.
  • Lee James on December 16 2014 said:
    As a genuine low-cost producer from reservoirs, the Saudis (and others) are in the driver's seat. They can coast through low crude prices on dollar reserves, and still pay their bills and keep citizens happy.

    The U.S. is left now taking a hard look at relatively high production-cost unconventional petroleum. Can we afford it? Do we even pay the full cost of using fossil fuel when fueling?

    Time for alternatives.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News