EMEA News
OPEC's December Vienna Meeting Figured Oil Floor at $35/bbl
A benchmark of $35 per barrel: that was the price of crude the Organization of the Petroleum Exporting Countries (OPEC) had set as a threshold when they met in Vienna in December to discuss production policy and the oversupplied market, a Nigerian official has stated.
Emmanuel Ibe Kachikwu, oil minister for Nigeria, disclosed the benchmark to reporters at an energy conference in Abu Dhabi this week when remarking that if crude prices remain at current levels or fall below $30 per barrel, an emergency meeting of the cartel would result.
He said, "I certainly hope it doesn't go below $30... the benchmark that we have was more in the $35 category."
WTI on Tuesday touched $29.93 a barrel.
Kachikwu acknowledged that prices have fallen faster than production rates since December's Vienna meeting, which failed to establish even a notional limit on output.
Although there is no indication OPEC will concede to an impromptu meeting aimed at slowing output, Kachikwu believes members might be amenable to curtailing investment and production expansion plans: "When you have too much madness in the room, you begin to look for some sanity, and that is what is going to happen."
He also said U.S. shale oil producers will be a long-term feature of the global market "even if they disappear" for a period of time, and that coordination between them and OPEC is essential to bring balance back to an oversupplied market.
Last November, a leaked private OPEC report revealed that the organization expects crude prices to remain under pressure through to 2019, with a rise of $5 per year to the $80 per barrel mark by 2020.
