Crude prices are set to rise from current “very low” levels that are hurting producers, Iraq’s Oil Minister Adel Abdul Mahdi said after a meeting of Arab petroleum-exporting nations.
Abdul Mahdi, whose country is the second-biggest producer in OPEC, didn’t forecast when prices would rebound from an almost seven-year low for Brent, the benchmark for more than half of the world’s oil. Qatar’s Energy Minister Mohammed Al Sada told reporters before the meeting in Cairo there was no need to be pessimistic about prices.
“There is no doubt that oil prices will rebound,” Abdul Mahdi told reporters Sunday after the meeting of the Organization of Arab Petroleum Exporting Countries. “This current level is too low, and it’s affecting oil producers. I think economic factors and fundamentals are still strong.”
A global oversupply of crude has triggered the worst slump in the energy business since the 2008 world financial crisis. Brent crude has tumbled 68 percent since June 19, 2014, as non-OPEC producers such as Russia and U.S. shale drillers boosted output. Saudi Arabia, the world’s biggest crude exporter, led the Organization of Petroleum Exporting Countries in November last year to defend market share instead of cutting output to support prices.
Brent for February settlement slid as much as 56 cents to $36.32 a barrel on the London-based ICE Futures Europe exchange and was at $36.34 at 3:38 p.m. Sydney time. The contract decreased 18 cents to $36.88 on Friday, the lowest close since December 2008. Prices are down 37 percent this year, set for a third annual loss.
OAPEC was established in 1968 to foster the development of the petroleum industry in member states as part of an economic integration plan among Arab countries. Seven of the nations within OAPEC are also members of OPEC.
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