OPEC will be under less pressure to cut oil production at its next meeting in mid-March if the US crude oil price stabilizes near the current $40-a-barrel level, Algeria’s energy minister said on Monday.
Algeria’s Chakib Khelil said US oil at $40 a barrel “is a good price for the moment.” Speaking to reporters at the John Hopkins School of Advanced International Studies, Khelil said a steep fall in oil prices below $40 will make an OPEC production cut more likely.
“We make a decision to cut (output), to stabilize it,” Khelil said of oil prices less than $40 a barrel.
Earlier in the day, OPEC Secretary General Abdullah al-Badri told reporters in London that OPEC was willing to cut more of its output in order to revive oil prices. “Current prices threaten the very sustainability of planned investment,” Badri said in a speech.
For the moment, Khelil said Saudi Arabia was the only OPEC member that could produce less than its allocated oil output quota required. “I don’t know of any other country that has that high level of production that could afford to cut more than what is required by the agreements we make,” Khelil said."
Separately, Khelil said he did not think world oil demand in 2009 would fall much further than forecast. He said oil prices should rebound to $60 a barrel by the end of the year. He said OPEC eventually wants oil to return to $70 to $80 a barrel. “I think it’s a good target (price) to re-initiate our investments” in oil projects, Khelil said.
Khelil blamed market speculators for the sharp rise in oil prices to a record $147 a barrel this summer and the subsequent steep drop in crude costs to current levels. (Reuters)