Current oil price level satisfies OPEC

Business Materials 13 September 2014 09:00 (UTC +04:00)
The current level of oil price is satisfying to the Organization of Petroleum Exporting Countries (OPEC), Parviz Mina, the international petroleum consultant says.
Current oil price level satisfies OPEC

Baku, Azerbaijan, Sept. 12

By Umid Niayesh, Temkin Jafarov - Trend:

The current level of oil price is satisfying to the Organization of Petroleum Exporting Countries (OPEC), Parviz Mina, the international petroleum consultant says.

The price of $95 to $100 per barrel satisfies the OPEC producers as well as the main crude oil buyers, Mina, who served as a member of OPEC Long-Term Strategy Committee, told Trend Sept. 12.

He went on to add that the both sides consider the current crude price as suitable and the parties do not want to make change on it. So, the OPEC countries have not decided yet to lower their export level to increase the price, he said.

Earlier on Sept. 10, Iranian oil minister Bijan Namdar Zanganeh said that the OPEC will not hold an emergency meeting to address the declining oil price. However he added that Iran is in favor of higher oil prices.

Mina said that the figures of the Iran's annual budget indicate that the Islamic Republic's economy still relies on oil revenues.

Commenting on effects of falling oil prices on Iran's economy the expert said that "while Iran's crude exports have sharply declined after the U.S. and the EU imposed sanctions on it, reducing the oil price would impose double negative effects on the country's sanction-hit economy."

Iran's oil revenues have fallen to $45 billion per year, while it experienced even $100 billion in previous years, Mina said.

The expert who served as head of international affairs for Iran's state oil firm also said that if OPEC decides to reduce its crude export level to support the price, only Saudi Arabia will be able to take effective steps on the issue.

"The OPEC can decrease crude exports volume to prevent a fall in oil prices, however for the time being countries such as Iran, Iraq, and Libya which vitally need oil revenues are producing and exporting crude at the maximum possible level," Mina said.

The mentioned three countries will not be able to effectively reduce their exports, he added.

It should be noted that international crude prices have sharply dropped in recent weeks.

Brent crude declined to its lowest intraday level in more than two years, and West Texas Intermediate to a 16-month low. Brent for October settlement dropped as much as $1.32 to $96.72 a barrel on the London-based ICE Futures Europe exchange, the lowest since July 2, 2012, and traded for $96.95, Bloomberg reported Sept. 11.

WTI for October delivery slid as much as $1.24 to $90.43 a barrel in electronic trading on the New York Mercantile Exchange, the lowest since May 1, 2013. Prices have decreased 7.9 percent this year, according to the report.
The OPEC Reference Basket (ORB) fell by a substantial $4.86 to $100.75/b in August as a downturn in oil prices continued for a second month, OPEC reported on Sept. 10.

On a year-to-date basis, the Basket was lower compared with the same period one year earlier. The Basket year-to-date value stood at $104.78/b compared with an average of $105.40/b the previous year, six cents lower.

On Sept.11, the OPEC Reference Basket weakened to $95.35 /b, $4.82 under the August average. Iran's Heavy crude oil price stood at $101.4/b in August and indicates a sharp fall by $4.79 compared to the preceding month.