Cited by the official KUNA news agency, Oil Minister Shaikh Ahmad Fahad al-Sabah said on Saturday if prices continued to increase, he believed OPEC would raise its production.
“We are awaiting the (OPEC) secretary general to start his contacts” about implementing the OPEC price band mechanism, which stipulates that prices must remain within $22-28 a barrel.
Al-Sabah said according to this strategy, if prices stayed higher than $28 a barrel for more than 20 days, then “OPEC would look into hiking its members’ output”.
But the Kuwaiti minister said previous experiences had taught OPEC that prices would decline in the near future.
OPEC ministers decided last month to cut production by 900,000 barrels per day (bpd), reducing the cartel’s daily ceiling to 24.5 million barrels as of 1 November.
The director of OPEC’s research division, Adnan Shihab al-Din, said on Saturday the current rise in world oil prices was based on sentiment not realities, adding that crude stocks were more than adequate to meet demand.
Plenty of crude
“Currently, there is a price spike but it is not a supply and demand fundamental … it resulted from concerns and is not real,” he said.
“It does not appear…there is any crude problem any place in the world…there is plenty of crude supply”Adnan Shihab al-Din,
director, OPEC Research Division
“It does not appear at all there is any crude problem any place in the world … in fact there is plenty of crude supply,” said Shihab al-Din, in Kuwait to attend an oil conference.
Al-Sabah said on Thursday that oil prices were “very high” and hinted OPEC’s output might be adjusted to keep them below $28 per barrel.
Oil prices recoiled on Friday on selling pressure by investment funds in the wake of figures showing a rise in US crude oil stocks.
New York’s reference light sweet crude November contract dropped 86 cents to $30.68 per barrel in early deals.
The price of benchmark Brent North Sea crude oil for December delivery – a new contract – fell 98 cents to $20.02 per barrel in closing trade.
Analysts said big fund managers appeared to have shifted their views on oil after fuelling a sharp rise in recent weeks.