OPEC to Explore Options to Lower Crude Prices

OPEC to explore options to lower crude prices

KUWAIT CITY, Aug. 28 (Xinhua) — The Organization of Petroleum Exporting Countries (OPEC) will be exploring options to keep crude prices at moderate levels during its meeting in September, the Kuwait News Agency reported Sunday.

“We are becoming increasingly concerned at the continuing high level of oil prices, which does not properly reflect the underlying fundamentals of the market,” Kuwaiti Minister of Energy and OPEC President Sheikh Ahmad Al-Fahad Al-Sabah said in a statement.

He noted that current supply exceeds demand leading to buildup in stocks and stocks of crude and distillates are above their seven year average.

“Oil resources and supplies are plentiful and OPEC has been producing 1.5 million more barrels per day than its quotas in the third quarter of 2005,” Sheikh Ahmad said.

Existing spare capacity in OPEC countries, together with new capacity additions early next year, will be more than adequate to cover demand growth throughout the winter this year and in 2006, he said, adding that demand is starting to slow down as a result of high prices.

In view of these fundamentals, one expects to witness some price moderation rather than further rises, he predicted.

Based on the closing prices of Friday, the worldwide price of a barrel of crude dropped after reaching record-breaking levels, but still remained above 67 US dollars per barrel.