Business | Oil & Gas
$123 oil price abnormally high - Opec
Oil prices are still abnormally high, and Opec member nations should not cut supply if they continue to fall as the oil market is now in balance, Opec President Chakib Khelil said on Tuesday.
- Reuters
- Published: 23:47 July 29, 2008
- Opec President Chakib Khelil (right) chats with Indonesia's Energy Minister Purnomo Yusgiantoro during a news conference after they held a meeting with Indonesian President Susilo Bambang Yudhoyono in Jakarta.
- Image Credit: Reuters
Jakarta: Oil prices are still abnormally high, and Opec member nations should not cut supply if they continue to fall as the oil market is now in balance, Opec President Chakib Khelil said on Tuesday.
Khelil, who is also Algeria's oil minister, said oil prices could fall to $80 or below in the long-term, if the US dollar continued to strengthen and geopolitical anxieties eased.
"The price today is abnormal at $123 a barrel," said Khelil, speaking to reporters on a visit to Jakarta to meet Indonesia's energy minister.
He did not elaborate, but Opec ministers have said repeatedly that they believe the surge in oil prices is not being driven by a shortage of supply.
The price of crude oil has slipped $22 from a record high above $147 a barrel earlier this month, but is still up 30 per cent on the year.
Asked if Opec members should cut supply if oil prices continue to decline, he said: "No, I don't think so, why should they cut production? They always want to make sure there is good supply and demand and to satisfy the demand."
Khelil said he did not see any signs of demand destruction from high prices.
"I think there is a good supply, there is a balance in the market."
Asked if there was an option to cut production at Opec's September meeting, he said: "It is up to the conference in light of the market at that time. The market changes so much."
He added that Opec was not fixated about any particular price level.
"We are not worried about any price, because we don't decide the price. We just meet the demand."
Indonesia is Asia-Pacific's only Opec member but it has seen oil production slump since the 1990s.
The Southeast Asian country said in May said that it planned to quit the cartel because it was unhappy with high oil prices after becoming a net importer.
Indonesia expects average daily oil output of 927,000 barrels per day this year, down from 950,000 bpd in 2007, and well short of consumption of around 1.2 million-1.3 million bpd.
"Indonesia plays a very important role, you know, in Opec and we would like it to continue playing that important role. But it is a sovereign decision....to remain or to suspend or to pull out," Khelil told reporters after meeting President Susilo Bambang Yudhoyono at the colonial-style palace in the capital.
Energy Minister Purnomo Yusgiantoro said that Indonesia had not yet officially submitted documents to withdraw from Opec, but said the country's interests were no longer in line with the cartel.
"President [Yudhoyono] has explained that we are a net oil importer. That means there is a difference in objectives from Opec as producer countries," he said.
Share this article
Related Articles
More from Oil & Gas
More from Business
Popular in Business
-
XPRESS
Way to go this DSF
A fun-filled route to guide you to all the happening dos in town
Business Editor's choice
-
What to expect at the Dubai Airshow
We preview what types of aircraft to expect at the Dubai Airshow
-
Air Arabia revamps its website
Upgraded site offers new features, accessible in range of languages
-
Dubai looks ahead to 2010 with new projects
Global visitor numbers up 4% on year and occupancy rates remain strong
