U.A.E. Sees OPEC Output Unchanged Even If Oil Drops to $40
By Anthony DiPaola and Mahmoud Habboush
Bloomberg
Dec 14, 2014 11:12 PM ET
OPEC will stand by its decision not to cut output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.
OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. The group is due to meet again on June 5.
“We are not going to change our minds because the prices went to $60 or to $40,” Mazrouei told Bloomberg yesterday at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.
OPEC’s 12 members pumped 30.56 million barrels a day in November, exceeding their target for a sixth consecutive month, data compiled by Bloomberg show. Saudi Arabia, Iraq and Kuwait this month deepened discounts on shipments to Asia, feeding speculation that they’re fighting for market share amid a glut fed by surging U.S. shale production. The Organization of Petroleum Exporting Countries supplies about 40 percent of the world’s oil.
Brent crude, a pricing benchmark for more than half of the world’s oil, added 49 cents to $62.34 a barrel on the ICE Futures Europe exchange at 12:04 p.m. Singapore time. The contract on Dec. 12 closed at the lowest close since July 2009. West Texas Intermediate crude rose 40 cents to $58.21.
The U.A.E. hasn’t been informed of any plan for an emergency meeting, Al-Mazrouei said. OPEC Secretary-General Abdalla El-Badri said, “we don’t know,” when asked at the same conference about the possibility of such a meeting.
An increase of about 6 million barrels a day in non-OPEC supply, together with speculation in oil markets, triggered the recent drop in prices, El-Badri said, without specifying dates for the higher output by producers outside the group such as the U.S. and Russia. Prices will rebound soon due to changes in the global economic cycle, he said, without giving details.
Clear Picture
“We will not have a real picture about oil prices until the end of the first half of 2015,” El-Badri said. Price will have settled by the second half of next year, and OPEC will have a clear idea by then about “the required measures,” he said.
OPEC kept its target unchanged last month because the group was uncertain whether a cut ranging from 1 million to 1.5 million barrels a day would have boosted prices, El-Badri said. The group wasn’t seeking to put pressure on the U.S. or Russia by maintaining output, he said.
“Our expectation in OPEC is that after 2020, the oil industry in the U.S. will decline” due to the nation’s low reserves, he said. The U.S. won’t become self-sufficient in oil and will continue to depend on Middle Eastern supply, El-Badri said.
U.S. oil drillers last week idled the most rigs in almost two years as crude tumbled below $60 a barrel. Producers including ConocoPhillips (COP) have curbed spending, and the number of rigs is declining from a record 1,609, threatening to slow the shale-drilling boom that has propelled U.S. production to the highest level in three decades.
To contact the reporters on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net; Mahmoud Habboush in Abu Dhabi at mhabboush@bloomberg.net
To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net Bruce Stanley.
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| Nigerian oil minister and OPEC President Mrs. Diezani Alison-Madueke. |
Bloomberg
Dec 14, 2014 11:12 PM ET
OPEC will stand by its decision not to cut output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.
OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. The group is due to meet again on June 5.
“We are not going to change our minds because the prices went to $60 or to $40,” Mazrouei told Bloomberg yesterday at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.
OPEC’s 12 members pumped 30.56 million barrels a day in November, exceeding their target for a sixth consecutive month, data compiled by Bloomberg show. Saudi Arabia, Iraq and Kuwait this month deepened discounts on shipments to Asia, feeding speculation that they’re fighting for market share amid a glut fed by surging U.S. shale production. The Organization of Petroleum Exporting Countries supplies about 40 percent of the world’s oil.
Brent crude, a pricing benchmark for more than half of the world’s oil, added 49 cents to $62.34 a barrel on the ICE Futures Europe exchange at 12:04 p.m. Singapore time. The contract on Dec. 12 closed at the lowest close since July 2009. West Texas Intermediate crude rose 40 cents to $58.21.
The U.A.E. hasn’t been informed of any plan for an emergency meeting, Al-Mazrouei said. OPEC Secretary-General Abdalla El-Badri said, “we don’t know,” when asked at the same conference about the possibility of such a meeting.
An increase of about 6 million barrels a day in non-OPEC supply, together with speculation in oil markets, triggered the recent drop in prices, El-Badri said, without specifying dates for the higher output by producers outside the group such as the U.S. and Russia. Prices will rebound soon due to changes in the global economic cycle, he said, without giving details.
Clear Picture
“We will not have a real picture about oil prices until the end of the first half of 2015,” El-Badri said. Price will have settled by the second half of next year, and OPEC will have a clear idea by then about “the required measures,” he said.
OPEC kept its target unchanged last month because the group was uncertain whether a cut ranging from 1 million to 1.5 million barrels a day would have boosted prices, El-Badri said. The group wasn’t seeking to put pressure on the U.S. or Russia by maintaining output, he said.
“Our expectation in OPEC is that after 2020, the oil industry in the U.S. will decline” due to the nation’s low reserves, he said. The U.S. won’t become self-sufficient in oil and will continue to depend on Middle Eastern supply, El-Badri said.
U.S. oil drillers last week idled the most rigs in almost two years as crude tumbled below $60 a barrel. Producers including ConocoPhillips (COP) have curbed spending, and the number of rigs is declining from a record 1,609, threatening to slow the shale-drilling boom that has propelled U.S. production to the highest level in three decades.
To contact the reporters on this story: Anthony DiPaola in Dubai at adipaola@bloomberg.net; Mahmoud Habboush in Abu Dhabi at mhabboush@bloomberg.net
To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net Bruce Stanley.
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