EMEA News
Kuwait Reverses Attitude of Earlier This Week, Now Favours Global Oil Market Developments
Although the probability of $50 oil later this year is viewed by many analysts as worrisome because the sudden rise will reactivate moribund U.S. shale producers, cause the Middle East to retaliate, and exacerbate the global glut, Kuwait is buoyed by the hike.
Anas Al-Saleh, acting oil minister and deputy prime minister for Kuwait, says rising oil prices are proof that the Organization for the Petroleum Exporting Countries' (OPEC) strategy to defend market share rather than target a price is working.
He told reporters in Kuwait City that his country will maintain its high output even though its budget has been strained due to the low prices that initially resulted from the switch to defending sales against higher-cost output.
Al-Salah said OPEC's market share "theory has been working well; now we see better prices in the market, demand has been increasing - part of it is outages of production in Canada, Libya, Nigeria, and the shale oil."
Despite a strike last month by oil workers that slashed Kuwait's crude output of between 3 and 4 million barrels per day in half, Al-Saleh added, "We're planning our production and we're investing heavily, heavily, heavily in our industry," including $60 billion on upstream projects through 2021.
Al-Saleh also suggested that if the current price of oil holds steady in June, "probably you will see a good understanding and maybe dialog between members of OPEC" – a reference to the cartel's June 2 Vienna meeting and the prospect that a renewed effort to freeze production and ease the global glut will be discussed.
Al-Salah's comments seem to be in dramatic contrast to earlier this week when Khaled Jarallah, deputy foreign minister for Kuwait, asked that Iran participate in a second proposed oil production freeze because the market can't take the excess anymore.
