OPEC Denies Price War, Shows Faith In Markets.
OPEC Secretary-General Abdullah al-Badri is urging the cartel’s 12 members to maintain production and exploration despite a lower demand for oil.
Yet al-Badri told an energy conference in Dubai on Dec. 14 that he is as baffled as anyone why the price of oil has dropped by so much in recent days. “The fundamentals should not lead to this dramatic reduction [in price],” Badri said, according to his Arabic-English interpreter.
As for sustained exploration and production during a period of low demand, al-Badri said such a strategy would prevent a shortage of supply once demand eventually is restored. He said oil customers, particularly the United States, will need OPEC’s oil for years to come.
Related: Iran Leader Says US Not Only Target Of Suspected Saudi Oil Price War
It was the first time that al-Badri had commented on the state of oil prices since Nov. 27, when OPEC, led by Saudi Arabia, refused to cut production levels from 30 million barrels a day in the face of an oil glut and its attendant price drop.
It also was the first comment by anyone in OPEC about thecartel’s own forecast, issued Dec. 9, showing that next year’s demand for oil will decline to 28.9 million barrels per day, 280,000 barrels lower than the previous month’s forecast and the lowest in 12 years. Reports by other energy monitoring agencies show similar drops in demand.
