Nov 25, 2014, 9:57 AM
News ID: 81400421
T T
0 Persons

No hope for oil price hike in near future: energy expert

Nov 25, 2014, 9:57 AM
News ID: 81400421
No hope for oil price hike in near future: energy expert

Tehran, Nov 25, IRNA - Nersi Qorban, a senior international energy expert, explains the reasons behind the oil price plunge in recent times, saying there is little hope for a jump in prices next year.

Nersi Qorban made the statement in an interview with the Persian-language newspaper 'Iran' published Tuesday.

Replying to a question by the paper on the reasons behind the latest developments in the oil market, Qorban said that the decline in oil prices has intensified in the past few months. We can study this issue through the supply and demand mechanism. On the one hand, we have witnessed a cut in the economic growth of European states as well as Asian states such as China and India, which reduced oil demand. There are no positive predictions for an increase in world economic growth in 2014.

On the other hand, non-OPEC oil producers also have increased their output, while the level of production of OPEC members stands at over 30 million barrels per day. Saudi Arabia, Iraq, Kuwait and the UAE, which produce more that 60 percent of oil in the 12-member organization, have increased their production to a maximum level in recent months.

Therefore, OPEC’s overall output has not decreased despite a partial cut in output by the other eight members. Political issues and successive discounts by certain oil exporters also intensified the plunge in oil prices.

On the role of other crude resources such as shale oil in the successive decline in oil prices, he told the daily that the US has recorded the highest production level among non-OPEC countries by supplying the market with shale oil. We cannot miss the role of US oil in the decline in (global) crude production. The US is expected to become the biggest producer of oil products in the world in the near future.

The US has increased shale gas production to a maximum in the past ten years and it is expected surpass that of Russia in 2014. The continuation of investment in oil production depends on high prices, therefore the current trend of oil prices is against the US interests.

As to why the OPEC which was set up to safeguard the interests of its members has failed to accomplish this, Qorban stated that OPEC was formed in 1960 when oil companies were controlling the supply and demand mechanism. But the current oil market condition is not suitable and the importance of OPEC has also declined.

Regarding his Opinion as to what Iran should do regarding oil market developments, he said, after the release of the country's blocked assets, Tehran should increase investment to optimize energy consumption by using the best technologies.

The country should retake its oil market share by increasing production to four million barrels per day.

Oil prices have reduced to its lowest level in recent times due to an increase in production by certain states and low economic growth of developed countries.

Members of the Organization of Petroleum Exporting Countries (OPEC), including Saudi Arabia, are under pressure to cut production to stem the global oil glut. There are hopes that the 166th OPEC ministerial meeting, scheduled for November 27 in Vienna, Austria, will yield satisfactory results, thanks to consensus among all member-states.

**1425
0 Persons