OPEC sec-gen urges non-OPEC to help clear oil stocks overhang

But if oil has previewed the way down for stocks, it’s possible that a turnaround in oil prices could equally preview the way back up.

“From a technical standpoint we could bottom at any time since we have breached the post Lehman-Shock lows, but people still feel that inventories will continue to rise as global crude supply continues to outpace demand”, said Tony Nunan, oil risk manager at Mitsubishi Corp in Japan. “We are talking about $40-60, that is after 2016”, said Fuzaia, who is No. 2 in Kuwait’s delegation to the Organisation of the Petroleum Exporting Countries after the oil minister.

“Lower commodity and oil prices reflect weakening demand”, HSBC said on Thursday.

In oil, the tremendous drop in prices has been attributed to oversupply – mostly from USA shale oil producers, but also from increased supply from OPEC members, including Saudi Arabia.

In June 2014, a barrel of Brent crude sold at $110.

Front-month West Texas Intermediate (WTI) crude futures traded at $29.15 US per barrel, up 80 cents from their previous close.

OPEC Secretary General Abdalla El-Badri said from London the crude oil market is going through a “significant readjustment” as free capital vanishes and supplies build in a weakened global economy. Lukoil’s own output is unlikely to meet the 100 million tons it produced past year, he said. “Yes, OPEC provided some of the additional supply a year ago, but the majority of this has come from non-OPEC countries”.

Eulogio del Pino, the Minister of Oil and Mining, said the meeting should be held in February in order to rapidly decide on policies that would stabilize the market.

The Saudi-backed strategy is also aimed at pressuring non-Opec member Russian Federation – the biggest global oil producer – and force fellow Opec member Iran to trim output.

Venezuela wrote to fellow OPEC producers requesting an emergency meeting as the collapse in oil prices hurts the group’s most vulnerable members, according to five people with knowledge of the matter.

A Platts report out last week showed OPEC oil production fell 130,000 barrels per day in December to reach 32.28 million b/d compared with the 32.41 million b/d in November. The price slide to its lowest since late 2003 this week provided a chance for them to book a profit on some of those positions, analysts said.