|
OPEC Stabilizes Oil Prices
CAIRO (IslamOnline & News Agencies) - Oil prices strengthened on Thursday as a downward effect created by the return of Iraqi crude oil to the world market on Wednesday eased, as demand in countries that experience cold winters was expected to keep at current levels against earlier forecasts of huge demand.
The world benchmark Brent blend - used to price two thirds of the world's internationally traded crude oil supplies - for February delivery remained at $26-$26.40 in early trading in London. This is $0.30 cents higher than Wednesday’s close, when Iraq started exporting its oil after a 13-day stop caused by a pricing policy dispute with the United Nations.
But members of the Organization of Petroleum Exporting Countries (OPEC) were quick to warn that the cartel may intervene and cut production to put the brakes on a possible slip in oil prices.
Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah said Thursday that cutting production was an option before a planned meeting for OPEC members on January 17th in Vienna. Al-Sabah, believed to be a price hawk, said OPEC members, mostly in the Middle East, may put up production by around one million barrels a day or more.
“If prices continue to fall, then any decision is possible and all options are available,'' he said.
OPEC oil prices went down by around 20% over the past few weeks as news that demand for heating oil in the United States and other European countries was lower than expected, prompting fears among oil producing countries that prices could go well below OPEC’s minimum target of $22 a barrel.
OPEC hawk Iran also said that an action will have to be taken by the group, set up in 1960 to safeguard the interests of oil producing countries, if prices go below $25.
OPEC President Ali Rodriguez reportedly said Wednesday that the oil exporting cartel could cut production by up to a million barrels per day (bpd) if prices fall below OPEC's target range for its basket price of $22-$28 per barrel. OPEC’s basket price is made up of an average of seven - always the same seven – crude commodities, produced mostly by members.
"If there is a prolonged price fall below $22, we will cut production immediately. Normally, it would be by 500,000 barrels per day, but if necessary it could be up to a million barrels per day," added Rodriguez.
Under pressure from consumer countries and Western powers, the cartel raised production four times this year to try and stop a downward spiral of oil prices that sent truck drivers and homeowners protesting in many European capitals.
|
