RIYADH (Reuters) – Oil prices would probably not fall even if OPEC raises production when it meets in December, since the market is being supported by factors other than supply, the oil ministers of Algeria and Iran said on Thursday.
Algeria’s Energy and Mines Minister Chakib Khelil also reiterated that he did not believe a production rise would be necessary at the group’s Dec. 5 meeting in Abu Dhabi, although his Nigerian counterpart left the door open for an increase.
Asked whether OPEC would raise output when it meets on Dec. 5, Nigerian Oil Minister Odein Ajumogobia said: “We haven’t got the agenda yet but it will certainly be among the issues to be discussed at the Abu Dhabi meeting.”
Oil ministers have made clear they will not discuss output policy at the heads of state summit now underway in Riyadh, adding that they believe factors beyond OPEC’s control – such as speculation and geopolitical anxiety — are driving prices.
“If we increase, we are going to have the same phenomenon that happened before, which means it may not even impact on the price,” Khelil told Reuters in the Saudi capital.
At its last policy meeting in September, OPEC agreed to raise production by 500,000 barrels per day (bpd) from Nov. 1, a move that failed to stop oil surging to a record-high of $98.62 last week. Oil has since fallen to around $94 a barrel.
Asked what action OPEC would likely take in December, Khelil said: “No change, because there is good supply. If there is anything to be done, it will be done to help psychologically the market. There is no need really.”
“Supply and demand are in equilibrium.”
Khelil’s remarks echoed those made by Iranian Oil Minister Gholamhossein Nozari, who said earlier on Thursday that international markets had sufficient crude supply, and increasing OPEC’s output would not bring down prices.
“All evidence suggests that there is enough oil in global markets, and an increase in OPEC’s share (of production) would not have an impact on global oil prices,” Nozari said, as reported by the official IRNA news agency.