Oil Prices To See Even More Tempestuous Prices
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Abdullah Badri, head of Organization of the Petroleum Exporting Countries (OPEC), said the group has not set a target oil price and urged Gulf States to continue with their exploration and production investments. Badri said the U.S. would still be relying on the Middle East for its crude oil for the next few years.
He said the current oil prices have dropped further than market fundamentals have indicated. Oil prices have dominated trade on the worldwide financial markets in the last few weeks as it struck a sequence of five-year lows.
His comments are the first to be made since OPEC decided to leave output levels at their current pace during their November meeting. Badri said the fundamentals shouldn’t have led to a dramatic drop in in price.
OPEC has looked for a suitable price level that is acceptable for both consumers and producers. Badri did not specify what this suitable price level is. Badri was asked if an emergency OPEC meeting would need to be called, to which he replied he didn’t know.
Oil has been relentlessly sliding, hitting currencies and energy stocks associated with crude exports. It’s caused many people to invest in riskier assets and push investors into the safety of government debt besides the powerful U.S. consumer sentiment.
Badri re-affirmed the group’s decision not to change the output level, saying it wasn’t targeting other oil producers. He said people have stated the idea was to affect the U.S. and its shale oil while others said the decision was targeting Iran and Russia. Badri said both statements are false.
When the world energy watchdog forecast suggested prices would decrease even more on weakened demand and ample supplies for 2015, brent crude hit under $62 a barrel on Friday.
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