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Kuwaiti oil minister warns crude price is tied to global economic recovery
3/9/2015
A drop in shale oil production has triggered a bounce in global oil prices, but they will not rise sharply as long as the world’s economy stays sluggish, said the Kuwaiti oil minister Ali Al Omair. Many factors are affecting oil prices, including violence in Iraq and Libya, state news agency Kuna quoted the minister as saying late on Saturday during a visit to Bahrain for an energy industry conference. Reduction of output will not have a major impact without a global economic recovery that would spur demand, he said. He said projections showed prices might improve this year, but added that they might also stay between US$50 and $60 per barrel. “Forecasts for the oil price this year indicate that it will gain or at least stabilise between $50 and $60 a barrel,” Kuna quoted him as saying. The minister said prices are currently supported by conflict in Iraq and Libya and by a drop in sand oil and shale oil output.
But that is counterbalanced by slow global economic growth, which is dampening demand, Mr Al Omair said.
World prices dropped at the close on Friday as the dollar rose sharply, making dollar-priced crude more expensive for buyers using weaker foreign currencies.
West Texas Intermediate for delivery in April slid $1.15 to $49.61 on the New York Mercantile Exchange, ending near its week-ago level.
Brent North Sea crude for April, the international benchmark, dropped 75 cents to $59.73 a barrel in London. Brent is up from lows near $45 hit in mid-January.
Asked about Opec’s decision in November to maintain output instead of cutting it in an effort to support prices, Mr Al Omair said it “was not a hostile resolution but balanced”.
The issue of oil’s drop is the collective responsibility of all oil-producing countries, both Opec and non-Opec, he said.
Last week, Saudi Arabia’s oil minister Ali Al Naimi said he expected oil prices to stabilise as supply and demand balanced, and urged non-Opec producers to help balance the market.
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3/9/2015
A drop in shale oil production has triggered a bounce in global oil prices, but they will not rise sharply as long as the world’s economy stays sluggish, said the Kuwaiti oil minister Ali Al Omair. Many factors are affecting oil prices, including violence in Iraq and Libya, state news agency Kuna quoted the minister as saying late on Saturday during a visit to Bahrain for an energy industry conference. Reduction of output will not have a major impact without a global economic recovery that would spur demand, he said. He said projections showed prices might improve this year, but added that they might also stay between US$50 and $60 per barrel. “Forecasts for the oil price this year indicate that it will gain or at least stabilise between $50 and $60 a barrel,” Kuna quoted him as saying. The minister said prices are currently supported by conflict in Iraq and Libya and by a drop in sand oil and shale oil output.
But that is counterbalanced by slow global economic growth, which is dampening demand, Mr Al Omair said.
World prices dropped at the close on Friday as the dollar rose sharply, making dollar-priced crude more expensive for buyers using weaker foreign currencies.
West Texas Intermediate for delivery in April slid $1.15 to $49.61 on the New York Mercantile Exchange, ending near its week-ago level.
Brent North Sea crude for April, the international benchmark, dropped 75 cents to $59.73 a barrel in London. Brent is up from lows near $45 hit in mid-January.
Asked about Opec’s decision in November to maintain output instead of cutting it in an effort to support prices, Mr Al Omair said it “was not a hostile resolution but balanced”.
The issue of oil’s drop is the collective responsibility of all oil-producing countries, both Opec and non-Opec, he said.
Last week, Saudi Arabia’s oil minister Ali Al Naimi said he expected oil prices to stabilise as supply and demand balanced, and urged non-Opec producers to help balance the market.
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