Crude oil prices will rise next year -Kachikwu
OPEC introduced output ceiling of 30 million bpd in its December 2011 meeting as it scrapped allocating fixed production quotas to member countries.
Venezuela’s oil minister said he would table a proposal for the group to reduce output by 1.5m barrels a day to try to bolster the price.
Kachikwu maintained that OPEC remained committed to do its part in protecting the environment and supporting sustainable development, adding that OPEC and its member countries were taking part in the climate change negotiations in Paris with the goal of full, effective and sustained implementation of the United Nations Framework Convention on Climate Change.
Non-Opec supply is expected to decrease next year, while global demand is anticipated to expand by 1.3 million barrels per day, according to Opec.
Saudi Arabian oil minister Ali al-Naimi said ahead of the meeting growing global demand could absorb an expected jump in Iranian production next year. The overproduction is likely to worsen next year as Iran plans to pump an additional 500,000 barrels a day within weeks of global sanctions being lifted.
Still, losses were muted as prices reached key support levels around $40 a barrel.
“We will be looking at a teeter-totter market”, Daniel Yergin, the Pulitzer Prize-winning oil historian and vice chairman of industry consultants IHS Inc. The statement said that the downward trend would stem mainly from the impact of investment cutbacks and the drop in US tight oil output, which had been on the decline since May 2015.
Guided by its biggest producer Saudi Arabia, OPEC has maintained output to force higher-cost producers to scale back their operations.
The Saudis have said they are only willing to talk about production cuts if Iran, Iraq and non-OPEC members like Russian Federation do the same.
Nigeria’s oil minister and President of the OPEC Conference Emmanuel Ibe Kachikwu at a press con …
Brent North Sea crude for January fell 60 cents to $43.24.
The crash in oil prices has OPEC so divided that the only thing the cartel can agree on is not to agree at all. OPEC has pumped more than its collective target of 30 million barrels a day for the past 18 months, data compiled by Bloomberg show. Iran is also in no mood to cut output just as it returns to the market after years of sanctions prevented it from exporting.
And so while Goldman is forecasting oil prices over the next few months to be near $40 a barrel, or roughly where they are trading today, there could be another 50% to fall as continuing OPEC production pushes producers towards the absolute lowest level they can conceivably manage. “Americans don’t have any ceiling, Russians don’t have any ceiling, why should OPEC have a ceiling?”
“This decision reflects the consensus going into the meeting of OPEC’s policy for prices needing to find a floor to deter new non-OPEC supply projects”, Gareth Lewis-Davies, London-based energy strategist at BNP Paribas SA, said by phone.