The latest crude price decline has been severe and there’s “tremendous” surplus in the market, Iraqi Oil Minister Abdul Kareem al-Luaibi said.
“It is very clear that there are tremendous surplus quantities that led to this severe decline in the prices,” al-Luaibi said today in Vienna, where he is attending the meeting of the Organization of Petroleum Exporting Countries. “This would not serve anyone.”
Oil prices at $100 to $120 are “a reasonable and acceptable price index,” he told reporters. Brent crude oil futures are trading near $99 today in London.
OPEC ministers are convening this week to review the group’s output target of 30 million barrels a day, which members are exceeding by about 1.9 million barrels, according to the International Energy Agency’s most-recent monthly oil-market report on May 11. OPEC’s 12 members, led by Saudi Arabia, supply about 40 percent of global crude.
There will be no discussion this week of individual quotas for member nations and it will be “many years” before OPEC talks about a specific allocation for Iraq’s own production level, al-Luaibi said.
Oil prices have plunged as Europe’s debt woes intensify, U.S. unemployment remains stuck above 8 percent and the threat of a conflict over Iran’s nuclear program recedes. Brent for July settlement has dropped 17 percent since the beginning of May on the London-based ICE Futures Europe exchange. The July contract fell 72 cents at $98.75 a barrel today.
Iraq expects to receive final development plans from international oil companies detailing plateau production rates “in a few months” as the country reviews its long-term output target, he said.