OPEC has no plan for oil summit to boost prices

Kuwait rejects Venezuela’s proposal about holding the conference

KUWAIT CITY: The Organisation of Petroleum Exporting Countries (Opec) has no plan to participate in a summit of oil producers proposed by Venezuela to support prices, Kuwait’s oil minister said on Monday.

The next meeting on Opec’s calendar is a twice-yearly ministerial gathering in December, Ali al-Omair told reporters when asked about the Venezuelan proposal.

“There will be no conference before December 4,” he said. “The problem is that there is no commitment from non-Opec producers for what they will undertake to help stabilise the market.”

Venezuelan President Nicolas Maduro earlier this month proposed a summit meeting between major world oil producers from Opec and non-Opec members to discuss slashing production to shore up prices that have slumped by more than half.

Omair said Opec was always asked in previous such meetings to make the production cuts “while others continued to produce, causing us to lose market share.”

Venezuela, an Opec member that relies heavily on oil revenues, has been trying hard to persuade oil producers to cut production to boost oil prices that plunged about 60% since June last year.

Oil prices fell in Asia on Monday as investors looked for further clues about the health of Chinese and US economies, the world’s top crude consumers.

US benchmark West Texas Intermediate for November delivery eased 48 cents to $45.22 a barrel and Brent crude for November dipped 50 cents to $48.10 in afternoon trade.

Omair said oil prices remain volatile in international markets because of uncertainty over supply and demand. About two million barrels per day (bpd) of surplus production is available in the markets, he said.

The slump in oil prices will not impact mega oil and non-oil projects in Kuwait, the minister said.

Like other Gulf neighbours that bank on oil for more than 90% of their revenues, Kuwait is projected to post its first budget deficit this year after 16 successive years of windfall.

Omair said Kuwait pumps around 2.8 million bpd and its output capacity is “slightly above this figure”.

Published in The Express Tribune, September 29^th, 2015.

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