DUBAI (Reuters) – OPEC is unlikely to change oil output in September to reverse the recent price fall unless the slide continues to below $80 a barrel, an OPEC source said on Tuesday.
Oil hit a three-month low of $118 on Tuesday. It has fallen by nearly $30 from a July peak of more than $147, but so far officials from the Organization of the Petroleum Exporting Countries (OPEC) have shown little concern.
OPEC President Chakib Khelil said last week the group, which pumps more than a third of the world’s oil should not consider cutting production. He said the market could fall to $70 to $80 in the long term.
“At the moment, and at this price level, there is no movement within OPEC to do anything,” the OPEC source told Reuters. “I don’t think ministers will change output. I think at less than $80 for OPEC oil, maybe they would do something.”
The drop in prices was mostly due to a lull in July in the political tension between the West and Iran over Tehran’s nuclear program, the source said.
That could easily be reversed and problems in OPEC member Nigeria could also push prices higher, the source added. Militant attacks have cut about a fifth of Nigeria’s output.
Concerns that slowing economic growth in top consumer the United States could further curb demand had contributed to oil’s fall, but the slide had little to do with market fundamentals, the source said.
OPEC boosted output for the third consecutive month in July as top oil exporter Saudi Arabia raised production to its highest level since 1981.
The kingdom pushed its production to 9.7 million barrels per day, up from 9.45 million bpd in June in response to rising demand and what it saw as unacceptably high prices.
Saudi Arabia hosted emergency talks between consumers and producers in late June aimed at addressing record fuel costs, which sparked protests worldwide and fed inflation.
OPEC oil ministers are due to meet on September 9 in Vienna to review output policy.
“We just have to wait and see what happens with these fluctuations before September. Will we see $140 to $150 again? We just don’t know,” the OPEC source said.