OPEC Head Tells Oil Market to Stop Panicking About PricesMaher Chmaytelli and Grant Smith
Oil will rebound by the second half of next year as supply and demand don’t justify the recent collapse and prices are now low enough to threaten investment in production, OPEC’s Secretary-General said.
While a report today from the Organization of Petroleum Exporting Countries cut forecasts for crude it will need to provide for most of the next two decades because of the shale-energy boom in the U.S., Secretary-General Abdalla El-Badri said the group isn’t “panicking” amid this year’s plunge.
“We’re concerned but not panicking,” El-Badri said at a press conference in Vienna today. “The price will rebound by the second half of next year. This situation of low prices cannot continue because if it continues, most of the investments will be stopped.”
Brent futures have tumbled 28 percent since mid-June, a move El-Badri said was excessive given that supply and demand levels are “reasonable.”
Ali al-Naimi, oil minister of Saudi Arabia, OPEC’s biggest member, is attending a conference on climate change in Venezuela and met with the country’s foreign minister, Rafael Ramirez. Ramirez told reporters they mostly discussed climate change yesterday.
Al-Naimi’s trip had been planned a about a year in advance and there’s nothing “peculiar” about the visit, El-Badri said. Oil prices have reacted to the “symbolism” of the trip as Saudi Arabia and Venezuela coordinated output cuts in the 1980s, according to Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London.
The Saudi minister is due to attend another event in Mexico next week. OPEC hasn’t invited producing countries from outside the group to it attend its ministerial meeting on Nov. 27, El-Badri said.