Global oil supply is sufficient and the Organization of Petroleum Exporting Countries will study the recent decline in crude prices to keep the market balanced, according to Algeria’s energy minister.
The economic slowdown in Europe because of the debt crisis may curb oil demand, and OPEC will address the situation at a meeting next week in Vienna, said Youcef Yousfi, Algeria’s Minister of Energy and Mines. The 12-member group pumps about 40 percent of the world’s crude.
“OPEC will study the price decline,” Yousfi said at a briefing at the World Gas Conference in Kuala Lumpur. “There is enough oil in the market today.”
Brent crude futures in London fell 15 percent last month, the most since October 2008, as signs of an economic slowdown in the U.S. and China added to concern that global fuel consumption will decline. The contract for July settlement on the ICE Futures Europe exchange traded at about $100 a barrel today.
Oil demand in Europe will probably increase this year, even as “some sort of stagnation” in consumption has been observed, Yousfi said.
Algeria, OPEC’s third-smallest member by output, produced 1.2 million barrels a day of crude last month, according to the minister. The country plans to boost its production capacity to 1.5 million from 1.4 million “in a few months,” he said.
Algeria also has “substantial” reserves of unconventional gas and is evaluating its option for processing and selling the fuel, according to Yousfi. It has estimated deposits of so-called tight gas of 1,000 trillion cubic feet and 8,000 trillion cubic feet of shale gas, he said.
The North African country exported 55 billion to 60 billion cubic meters a year of gas, the minister said. It is building two new facilities to process liquefied natural gas to be ready next year and has met potential customers in Asia to discuss exports. Older plants will be revamped or closed.
“Gas demand is slowing down in Europe, but it’s for the short term,” Yousfi said. “Next year, demand may increase.”