OPEC – Current Oil Prices Will Not Collapse
The chief of the Organization of the Petroleum Exporting Countries (OPEC) said that he did not fear any breakdown in oil prices as he anticipates markets to stay balanced throughout 2013.
Several analysts have cautioned that current crude prices may drop in the next months due to a historically high production of oil combined with poor demand caused by economic worries.
At a speech in a Chatham House energy conference, the secretary general of OPEC, Mr. Abdalla Salem el-Badri, said that they are not seeing a collapse in the price of oil.
At the moment, they consider the market to be highly balanced. Further, OPEC considers the market sufficiently supplied to cover the rise in the demand for oil for the remainder of this year.
But the leader of the OPEC, which makes more than one out of three daily oil barrels consumed worldwide, cautioned that too much speculation caused by geopolitics and the economy may keep prices unstable.
Any sharp decline in the price of oil could negatively impact the economies of OPEC member countries that are dependent on oil revenue. Moreover, it can also hurt future oil investments in exploration projects.
Low per barrel oil prices could possibly affect the whole crude market if additional investments are halted at the same time, said Badri.
Those kinds of consequences may lead to extremely expensive prices of oil in the future, added Badri.