Opec has no plans for an emergency meeting to respond to the slump in prices, according to delegates from the group, while members have discussed the possibility amid a persistent oversupply of crude.
Four delegates from the Opec, which controls about 40 per cent of world oil supplies, said they were not aware of any plan for an emergency meeting, asking not to be identified because discussions are private. Some members have discussed holding a meeting before the scheduled December 4 gathering, the Algerian official news agency reported citing energy minister Salah Khebri.
Oil has slumped more than 25 per cent since this year’s peak in June amid signs the global surplus will be prolonged. US inventories remain more than 90 million barrels above the five- year seasonal average. Societe Generale and JPMorgan Chase & Co cut their price forecasts on weaker demand growth and oversupply.
“We support an emergency meeting of Opec,” Nagi Elmagrabi, chairman of Libya’s state-run National Oil Corp, said by phone Monday. “Global supply should be reduced in order to lift prices.”
Political strife cut Libya’s output to about 400,000 barrels a day, compared with 1.6 million barrels a day before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule, according to data compiled by Bloomberg. Algeria produces 1.1 million barrels a day.
The oil price slump is due to “oversupply, declining demand in China and the agreement on the Iranian nuclear which affected the market,” Mr Khebri said. Iran plans to boost crude production after a deal last month with world powers that will lift sanctions in exchange for curbs on the country’s nuclear programme.
“It doesn’t look right now as if there would be enough of a consensus” to hold an emergency Opec meeting, Paul Horsnell, head of commodities research at Standard Chartered said by e-mail from London.
Opec decided at its last meeting on June 5 to keep its production target of 30 million barrels a day unchanged to defend market share amid rising output from higher-cost producers such as US shale companies. The policy has been led since last year by Saudi Arabia, the group’s largest producer with an output of about 10.6 million barrels a day.
Follow The National’s Business section on Twitter