Algeria Oil Minister Says OPEC May Hold Emergency Meeting Before June

OPEC may still hold an emergency meeting before its June session to discuss how to tackle a surplus in global oil supplies and a drop in prices, Algeria’s energy minister said on Tuesday.

“We will continue our efforts through dialogue with OPEC and non-OPEC producers to remove a surplus estimated at 2 million barrels per day,” Youcef Yousfi told state television when asked about the slump in crude prices. “We may hold an emergency meeting before June.”

The Algerian minister reiterated that oil prices were down because of low consumption and high supplies especially from non-OPEC petroleum-producing nations.

Brent crude, which has fallen more than 40 per cent in the last six months, slipped to a five-year low of $65.29 a barrel on Tuesday on worries over a supply glut before rebounding slightly. Oil prices have been under pressure as the dollar has strengthened and after OPEC decided against an output cut.

But OPEC members such as Algeria and Venezuela that rely heavily on energy resources for state spending have been under pressure over their budgets. Algeria’s current budget is based on a global oil price of $90 per barrel.

The North African state still has around $192 billion in foreign reserves.

But Yousfi said Algeria’s government had so far not discussed any spending cuts because of the oil price drop. Algeria’s state energy firm Sonatrach said this week that it would not trim back on its exploration spending.