OPEC won’t cut its collective crude output when it meets later this month and global oil prices will stabilize once the surplus is absorbed by the market, Kuwait Oil Minister Ali Al-Omair said.
OPEC, which supplies about 40% of the world’s oil, meets Nov. 27 to debate supply. The 12-member Organization of Petroleum Exporting Countries, which has a production target of 30 MMbopd, pumped 30.974 MMbopd in October, according to data compiled by Bloomberg.
“I don’t think there will be any cut in the production,” Al-Omair said at a conference in Abu Dhabi in the United Arab Emirates. “We feel prices will settle down once surplus oil is absorbed.”
Oil tumbled into a bear market this year as supply expanded from the U.S. to Libya. OPEC members Saudi Arabia and Kuwait have resisted calls to cut output while Libya, Venezuela and Ecuador have asked for action to prevent even lower prices.
Kuwait has no plans to cut its own crude production, which should increase to 4 MMbpd by 2020, Al-Omair said. Kuwait produced 2.85 MMbopd in October, according to data compiled by Bloomberg.
OPEC’s decision on output will be unanimous, the United Arab Emirates’ Energy Minister Suhail Al Mazrouei said at the same conference, without indicating what the group will decide when its members gather this month in Vienna. The U.A.E. and the rest of OPEC are committed to supplying oil worldwide, and markets shouldn’t “panic,” Al Mazrouei told reporters.
Analysts are divided on what OPEC will decide on Nov. 27, with 10 of 20 surveyed last week predicting that the organization will announce an output reduction. BNP Paribas SA, Societe Generale SA and UBS AG are among those forecasting that OPEC will cut output with estimates for the reduction ranging from about 500,000 bpd to 1.5 MMbpd.
Oil will rebound by the second half of next year as supply and demand don’t justify the market’s collapse and prices are low enough to threaten investment in production, OPEC Secretary-General Abdalla El-Badri said Nov. 6.
Oil markets shouldn’t be distracted by short-term price swings, Sultan Al Jaber, CEO, energy, for Mubadala Development Co., said at the Abu Dhabi conference. “The industry has always undergone short-term price fluctuations” and should be focused on long-term projects, he said.
“The U.A.E. remains committed to supplying customers and partners,” Al Jaber said.