On Saturday Kuwait Oil Minister and State Minister for National Assembly Affairs Dr Ali Al-Omair urged non-OPEC crude producers to work together and prevent severe fluctuations in oil prices, in an attempt to try and stabilize the market.
The Kuwait Oil Minister asked for non-OPEC oil producers to “cooperate with the Organisation of Petroleum Exporting Countries to guarantee stability of the market and prevent major swings in oil prices.”
He made the announcement from Vienna, where the OPEC recently had a meeting and decided not to decrease oil production, which has sent oil prices right down.
Dr Ali Al-Omair said that the OPEC decision was the right one and that it was the “best solution at the present time”, adding that it was based on a comprehensive study of the global oil market.
OPEC members will not have an emergency session unless absolutely necessary, and agreed to have their next meeting in June next year.
Following the decision by OPEC to keep production up the US benchmark West Texas Intermediate for delivery in January fell to $66.15 a barrel on the New York Mercantile Exchange (down $7.54 from its closing price on Wednesday).
Brent fell to below $70, down to $69.78 a barrel, settling at $70.15 a barrel. This is the first time that Brent has dropped below $70 in four and a half years.
In an interview with KUNA, Al-Omair said:
“OPEC ministers’ discussions about the developments of the oil price and production led to a concurrence that keeping the cartel’s production ceiling at 30 million barrels per day is the best solution at the moment,”
He pointed out that the oil prices won’t be in the red for very long.
“Extra supply in the oil market and the slowdown in the global economic growth will not last for a long time. The market will gradually absorb the oversupply which will reflect positively on prices.”
If the global economy shows signs of recovery then the demand for cruse oil will increase and as a result so will prices.
He said that it is not likely for there to be an extraordinary meeting held by OPEC.
“The member states agreed to hold their next regular meeting in June, while continuing to closely following up developments on the oil market,”
“There is no intention to hold an extraordinary meeting unless the necessity for one arises.”
He said that non-OPEC producers should cooperate with OPEC to prevent instability in the oil market and control fluctuations of oil prices.