OPEC frets as oil prices remain unstable

Abdullah El-Badri, Secretary General of the Organisation of the Petroleum Exporting Countries, said the group would not cut output in response to lower prices.

Holdings of ICE Brent crude put options, which give the owner the right, but not the obligation, to sell oil at a predetermined price by a certain date, outnumbered those in calls – which offer the option to buy – by an average of 2:1 over the coming 12 months, highlighting a bearish bias in the market.

‘We are not ready to reduce our production.’.

Badri said he had received no request for an extraordinary OPEC meeting before the next scheduled gathering in December despite speculations that it might be needed to discuss Iran’s return to normal production levels. Russia, which is not part of OPEC but is the world’s top crude producer and depends heavily on energy exports, hasn’t made any cuts either. While we don’t know what exactly goes on in the mind of president Vladimir Putin, his game face suggested the belief that oil prices would stay low for several months-perhaps as long as a year-but by the latter half of this year, would begin to climb back.

The fall followed a rebound in prices after a steep slump previous year.

U.S. light crude was down 90 cents at $47.62 a barrel.

When asked about slowing demand growth from China, El-Badri said OPEC is not concerned. This month’s deal between world powers and Iran over Tehran’s nuclear work could further add to supplies in 2016.

ALGIERS- OPEC (Organization of Petroleum Exporting Countries) rejected on Thursday a drop in production quotas, despite the recent relapse of the courses and the expected arrival of Iranian black gold on the market.

Badri, however, insisted OPEC welcomed the lifting of sanctions and would be able to cope with any increased volumes. In June, Iran pumped 2.85mb/d, compared with an average of 3.63mb/d in 2011, the year before the imposition of western sanctions. But few have ventured to cut production, and instead have targeted higher-producing wells and more efficient drilling techniques as they all fight to hold on to their customers and sell more oil, even at lower prices.

Russia’s central bank was forced to halt its purchase of foreign currency – a way to replenish the reserves it spent on bolstering the battered rouble – in order to curb volatility on the currency market.

Meanwhile, Russia’s Energy Minister Alexander Novak explained AlovervallenBadri that is actually Russian Federation and Opec are following the same aims of holding the oil market balanced and stable.

“The question of lowering production is very hard for Russian Federation, many countries feel that this is not necessary”, Novak said.

In many ways, the current conflict in Yemen can be seen as a “proxy war” between two OPEC members, motivated by oil.