Kuwait: OPEC unlikely to cut output

Brent crude oil settled at $90.21 a barrel on Friday after earlier falling to $88.11, the lowest since December 2010. Saudi Arabia said it raised production last month, prompting beliefs that the kingdom is looking to defend market share, rather than prices.

Oil ministers from the Organisation of the Petroleum Exporting Countries are meeting in Vienna on 27th November to consider whether to adjust their output target of 30mn barrels per day (bpd) for early 2015.

Some OPEC countries are becoming more worried about the drop in oil prices, while Venezuela has called on OPEC to hold an emergency meeting to stop the price slide.

There is differing views within the 12-member group indicating a split between Saudi Arabia and its GCC neighbours and other OPEC members, such as Iran, who face greater budget pressures from sub-$100 a barrel oil.

In a monthly report issued on Friday, OPEC said the more than $20-a-barrel price fall since the end of June reflected weak demand and ample supply, but supported the view that winter demand would revive the market.

OPEC left its forecasts for global oil demand growth unchanged and still expects an acceleration of demand growth in 2015. Total OPEC output grew by 400,000 bpd to 30.47mn bpd, a rise led by Libya and Iraq.

“I don’t think today there is a chance that (OPEC) countries would reduce their production, especially since the target that OPEC has given itself is 30mn bpd, which we have not reached until now,” al-Omair said.

He added that $76-77 a barrel might be the level that would end the oil price slide, since that was the cost of oil production in the United States and Russia.

He said cutting output would not necessarily prop up prices and indicated that oversupply in crude output was mainly because of an increase in production from Russia and shale oil from the United States.

“If we have something (to do) to preserve the stability of the prices or bring it back to previous levels, we would not hesitate in doing it, but it is known that this fall is not because of a decision taken by OPEC,” the minister said.

Al-Omair also said the oil price decline in recent weeks was expected, adding that oil prices are expected to rise “or at least to keep their current level” when seasonal demand picks up in winter.