Ministers from Saudi Arabia, Kuwait and Iraq said OPEC needn’t cut production next year to make room for additional supplies from Iran, Libya and U.S. shale oil.
“I am optimistic the market will stay balanced and stable next year,” Saudi Oil Minister Ali Al-Naimi said today in a speech at a meeting of Arab oil exporters in Doha, Qatar. “Shale oil is not posing any threat to Saudi Arabia and OPEC,” he told reporters.
Commerzbank AG said in a Dec. 10 report that the Organization of Petroleum Exporting Countries would need to cut output should Iranian and Libyan production return to the market. OPEC, content with current oil price levels, agreed at a Dec. 4 meeting to keep the group’s crude output ceiling unchanged at least until June.
Iran is seeking to raise oil output to 4 million barrels a day, the country’s oil minister, Bijan Namdar Zanganeh, said at the OPEC meeting, after a Nov. 24 agreement over its nuclear program opened the door to an easing of sanctions.
Iran and world powers last month struck an initial accord that broke a decade-long diplomatic stalemate, setting limits on the country’s nuclear program in exchange for about $7 billion in relief from sanctions over six months.
U.S. shale oil is poised to increase the country’s crude production to 9.6 million barrels a day in 2016, a level it last reached in 1970, the U.S. Energy Information Administration said Dec. 16.
“OPEC can meet demand for years to come, so don’t make shale oil a scarecrow for OPEC and other producers,” Kuwaiti Oil Minister Mustafa Al-Shemali told reporters today.
Libya is prepared to use force to reopen oil export ports that have been closed by rebel groups for the past five months, Oil Minister Abdulbari Al-Arusi said today. The shutdown has reduced Libyan output to 250,000 barrels a day from 1.4 million barrels a day in March.
“Supplies are in balance with demand so in reality there are no fears” over a surplus in the market, Iraqi Oil Minister Abdul Kareem al-Luaibi said to reporters today.
West Texas Intermediate crude climbed to a two-month high yesterday after a report showed the U.S. economy expanded in the third quarter at a faster rate than previously estimated. WTI for February delivery rose 28 cents to $99.32 a barrel on the New York Mercantile Exchange. It was the highest settlement for a contract closest to expiration since Oct. 18.
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