There is no need for OPEC to hold an emergency meeting right now because there is no shortage of crude supplies in the market, said Youcef Yousfi, Algeria’s Minister of Energy and Mines.
Oil fell from the highest level since September 2008 yesterday after Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said that OPEC members are discussing whether to hold an “urgent meeting.” Oil slipped 0.6 percent today after supplies surged at Cushing, Oklahoma, the delivery point for the New York contract.
“We don’t see any physical shortage of oil in the market, and we don’t see any need for OPEC to meet today unless there is a change,” Yousfi said at CERAWeek, an IHS Cambridge Energy Research Associates conference in Houston. If the supply situation changes, “I am sure OPEC will meet and take action,” he said. OPEC’s next scheduled meeting is in June.
Algeria is the Organization of Petroleum Exporting Countries’ third-smallest oil producer, leading Ecuador and Qatar. It pumped 1.25 million barrels a day of oil in February, according to Bloomberg News estimates.
Anti-government demonstrations have spread through the Middle East, fueling concern that crude supplies will be disrupted and causing oil prices in New York to jump 15 percent this year through yesterday. Violence in Libya, Africa’s third-largest producer, has cut output by as much as 1 million barrels a day, according to the International Energy Agency.
Angolan Oil Minister Jose Maria Botelho de Vasconcelos said yesterday that OPEC should wait to see how Libyan events unfold before scheduling an extraordinary meeting.
Crude oil for April delivery fell 64 cents to settle at $104.38 a barrel on the New York Mercantile Exchange. The contract closed at $105.44 on March 7, the highest settlement since Sept. 26, 2008. Futures are up 28 percent from a year ago.
The price increase has been “psychological,” and the market isn’t taking its cues from the realities of the supply and demand situation, Yousfi said. Prices will return to levels seen before the Middle East unrest began when the crisis ends, he said.
The U.S. boosted its oil-price forecast for the year to $101.77 a barrel from February’s projection of $93.26 because of the unrest in the Middle East, according to the monthly Short-Term Energy Outlook published yesterday by the Energy Information Administration, the statistical arm of the Energy Department.
There is no demand for increased exports or production of Algerian light crude oil after the curtailment of Libyan supply, Yousfi said.
“There is no demand for extra export or extra production of crude from our country,” he said. Saudi Arabia, OPEC’s largest producer, has boosted exports to make up for any Libyan shortage.
The minister also said he was “confident” of stability in Saudi Arabia and in the kingdom’s oil production and exports. Websites in Saudi Arabia have called for nationwide demonstrations on March 11 and March 20, according to Human Rights Watch.
OPEC ministers decided at the group’s last meeting on Dec. 11 to maintain production limits. OPEC hasn’t altered quotas since December 2008, when the group announced record supply cuts that have left the 12-member organization with about 6 million barrels a day of spare capacity.