Kuwait City: Oil's price slide to $65 (Dh238,69) a barrel might raise concern among Opec members that crude is too cheap, Kuwait's oil minister said, declining to comment on any action that the group might take to buttress prices.
"This will draw our attention," Shaikh Ahmad Al Sabah told reporters Wednesday at parliament in Kuwait City. At the same time, the Organisation of Petroleum Exporting Countries doesn't need to consider $65 as a minimum threshold below which it will act to try to lift prices, he said.
Debt crisis
Opec must provide a "clear signal" of what it considers a floor price for crude to discourage investors from pulling out of the oil market, JPMorgan Chase & Co said in a research note Wednesday.
Oil, which traded as high as $87.15 a barrel on May 3, dropped as low as $64.24 on May 20 as investors sold the commodity on concern that Europe's debt crisis may spread. Crude for July delivery rose as much as $2.12, or 3.1 per cent, to $70.87 a barrel yesterday in electronic trading on the New York Mercantile Exchange.
Sentiment in commodities and financial markets, rather than the fundamentals of oil supply and demand, are driving crude prices lower, Ahmad said.
Opec does "not yet" need to call for an emergency meeting, he said. The group's next scheduled gathering is in October.
Opec Secretary-General Abdullah Al Badri has said that prices of between $70 and $90 are reasonable and encourage producers to intensify efforts to explore for crude.
Saudi Arabian Oil Minister Ali Al Naimi, representing the group's biggest exporter, said on March 30 that he hoped prices would remain within a range of $70 to $80.
