OPEC is unlikely to cut oil production in an effort to prop up prices because such a move would not necessarily be effective, Kuwait’s oil minister Ali al-Omair was quoted as saying by state news agency KUNA on Sunday.
Brent crude oil settled at $90.21 a barrel on Friday after earlier falling to $88.11, the lowest since December 2010, as Saudi Arabia said it raised production last month, adding to perceptions that the kingdom is looking to defend market share, rather than prices.
Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna on Nov. 27 to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015.
“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 30 million bpd, which we have not reached until now,” Omair said, according to KUNA.
KUNA also quoted Omair as saying $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, KUNA cited him as saying.
“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.
Some OPEC countries are becoming more worried about the drop in oil prices and Venezuela has called on OPEC to hold an emergency meeting to arrest the price slide.
The differing views within the 12-member group highlights a split between Saudi Arabia and its Gulf Arab allies and other 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 echoed the view of core Gulf OPEC members in saying 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 30.47 million bpd, a rise led by Libya and Iraq.
Omair also said the oil price decline in recent weeks was expected, adding: “We are still able to adapt”.
Oil prices are expected to rise “or at least to keep their current level” when seasonal demand pick up in winter, he said.