Vienna: The Organisation of Petroleum Exporting Countries (Opec) has long recognised the importance of dialogue and cooperation with other producers and stakeholders in the industry and is always “ready to talk” in this regard to ensure market stability and order.
That was the view put forward by Opec Secretary General, Abdullah Salem Al Badri, in a question and answer interview with the Caspian Energy Journal.
Al Badri observed that, in 2013, prices had generally moved within the $100 110/b, a range that was acceptable to producers and consumers alike.
“However, it is important that we continually look to mitigate extreme volatility and excessive speculation,” he professed, citing the example of 2008 when crude prices had reached a peak of $147/b in the summer months, before sinking to a low of around $30/b in December of the same year.
“This is clearly not conducive to the effective functioning of the market, particularly given the long-term nature of investments in our industry.
“We cannot avoid speculation and volatility altogether it is part of the market but it is vital we do not see a return to what the market saw in 2008. The goal, for both producers and consumers, must be a stable price,” he stated.
Asked what factors would ensure growth in global oil demand in 2014, Al Badri informed that Opec s Monthly Oil Market Report saw global oil demand growth of one million barrels per day in the year, slightly higher than in 2013.
He said it was clear that the main driver of growth remained countries outside the Organisation of Economic Cooperation and Development (OECD), which were projected to increase demand by 1.2m bpd, compared to an expected decline of 200,000 bpd in the OECD region.
“In terms of factors, obviously the central one is the economy. It is clearly essential that the world sees a return to balanced and sustainable. Overall, we are cautiously optimistic for 2014, although there are evidently mixed messages among regions.”
Concerning the slowdown in China’s economic performance, Al Badri said that while the country s economic growth for 2013 had slipped from a predicted eight per cent at the start of the year to 7.6 per cent at the end, the numbers were still clearly positive.
“We hope that this slowdown is just a short-term issue, and not a long-term trend.”
Questioned about the extent of the global gas sector and whether it was detrimental to Opec s standing, Al Badri said the Organization recognised the expanding role of gas.
The most recent Opec World Oil Outlook anticipated that gas would increase its share of the energy mix from around 22 per cent in 2010 to close to 26 per cent in 2035. However, its overall share would still lag that of oil, which would still contribute over 26 per cent to the energy mix in 2035.
“So what does this mean for Opec? We believe that oil will see significant expansion and remain central to
the global energy mix.”
Al Badri said that in terms of barrels pere day, oil demand would increase by almost 20 million bpd by 2035. Thus, it would evidently remain central to Opec member country economies.
“From the gas perspective, yes our member countries have significant reserves. And they will decide on how to develop these. Let me add here that Opec welcomes the efficient and sustainable development of all energies and energy technologies,” he said.