OPEC expects oil prices to fall to $30 per barrel
The Jakarta Post, Jakarta
The Organization of Petroleum Exporting Countries (OPEC) expects to see a fall in global oil prices to as much as US$30 per barrel, its president Purnomo Yusgiantoro said here on Thursday.
"Oil prices have retreated, but we want them to fall to about $30 per barrel. That would be good enough," said Purnomo, who is also the Indonesian minister of energy and mineral resources.
He said OPEC would first take an inventory of its spare oil capacity before making any decision on a possible increase in its official output ceiling at the cartel's meeting on Sept. 14 in Vienna, Austria.
"That's part of the agenda. If we consider that (raising output) needs to be done, we'll take an inventory on how much spare capacity we have from each member of OPEC, so we can raise OPEC quotas," said Purnomo, ruling out the possibility of moving the meeting up to an earlier date.
He previously said that, if needed, OPEC would be ready to increase production by between 1 million and 1.5 million barrel per day (bpd).
Purnomo said members of OPEC were producing more oil than the official quota in an effort to cool down an overheated market. Currently, the cartel's oil production reaches 30 million bpd, consisting of a quota of 26 million, two million from Iraq, and two million in overproduction.
OPEC lifted its official output limit by 500,000 bpd to 26 million bpd on Aug. 1.
Purnomo also said the cartel would consult non-OPEC oil producers about ways to bring down crude prices.
Meanwhile, world oil prices experienced another hiccup on Thursday following news of multiple attacks on a number of pipelines in Iraq.
Oil prices rose slightly due to technical factors and reports that eight oil pipelines in southern Iraq were sabotaged in an overnight explosion, which traders said contributed to price rises.
U.S. light crude for October delivery struck US$44.73 per barrel after declining by $1.74 on Wednesday. Meanwhile, London's Brent crude, also for October delivery, tipped $41 after plunging $1.64 the day before.
The prices, however, remain far below last Friday's all-time high of $49.40 per barrel.
Oil prices significantly declined on Wednesday following a modest improvement in the supply outlook, which encouraged speculators to bank their profits.
Global oil prices have increased by more than 30 percent this year on worries over supply disruptions and continuing strong demand from energy-hungry countries, such as the U.S. and China.