Oil prices won’t come down, says Opec president

Chakib Khelil, president of the Organisation of the Petroleum Exporting Countries (Opec), on Tuesday rebuffed calls from oil-consuming countries to increase supply, saying that the cartel had already done what it could on high prices.

“Opec has already done what Opec can do and prices will not come down,” Khelil told journalists as he arrived for a meeting with European Union energy officials in Brussels.

Ahead of a summit between producers and consumers in Jeddah last weekend, Opec heavyweight Saudi Arabia promised on Thursday to lift its oil production by 200 000 barrels per day.

However, Saudi Arabia’s increased output, to counter the fears of inflation-hit consumers, exposed divisions within Opec at the summit, with Khelil and others opposed to a production hike.

“Other member countries don’t want to increase their production because, as they’ve said many times, from our perspective we don’t see any shortage in the market,” Opec secretary general Abdullah al-Badri said.


In the face of calls from consumer countries for an oil output hike, al-Badri insisted that “the market is full of oil”, blaming “other factors” for the high price of crude, including refinery problems and hedge funds piling into the market.

EU energy commissioner Andris Piebalgs urged Opec to do away with the grouping’s production ceiling in order to provide relief to the market.

“In my opinion, there is no reason to keep ceilings on production,” he told journalists.

“If there are no ceilings, markets will adapt much faster,” he added. “In this respect we could expect prices to go down, not go up as the tendency has been till now.”

French Energy Minister Jean-Louis Borloo, whose country takes on the EU’s rotating presidency in July, stressed that high oil prices were a concern for consumers and producers alike.

“There’s not the producers on one side and consumers on the other,” he said. “We’ve entered a period where we really have to agree on a global energy pact because our interests are clearly linked.”

“We’ve got to decrease our energy needs. Producer countries have to participate, there needs to be clarity and transparency about needs and supply,” he told journalists.

Borloo said that although financial market speculation “exacerbated” high oil prices, it “did not create them”.

“What’s true is that the mass of the financial markets has jumped into commodities,” he said.

Piebalgs also said he was “not convinced” that speculation on financial markets was “a major factor” behind high oil prices.

“The basic difference between us and Opec is that they believe that it is mostly speculation, and in my opinion it is that market fundamentals that are not responding any more and that’s why the prices are going up,” he said.

“Financial markets are necessary to have clarity about how to invest and what prices are to be expected. Financial markets have changed but we have not seen any manipulation.” — AFP

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

The European companies that armed the Ivorian civil war

AN OCCRP investigation reveals that Gunvor and Semlex brokered weapons-for-oil deals in early 2011 when Côte d’Ivoire was in crisis, despite a UN arms embargo

Load-shedding’s silver lining: Lower levels of sulphur dioxide air pollution

Analysis of Nasa data shows that although SO₂ emissions around the world have fallen by about 6%, the levels are high enough to harm the health of billions of people.

Controversial oil reserves sale ‘corrupt’ and ‘dishonest’ court hears

The sale of South Africa’s crude oil reserves is now facing a criminal investigation by the Hawks

The coronavirus and the rise of the network society

Two kinds of virus, one biological and the other digital, have spread around the world, changing society and creating social elites

Remember, corporations are adept at deflection campaigns

In this moment where those corporations are “stepping up” to the Covid-19 challenge, let’s not forget their true character and where and how they have made their money

2019: The ones who left us

From Uyinene Mrwetyana, Oliver Mtukudzi to Xolani Gwala, Mail & Guardian remembers those who have passed on
Advertising

Subscribers only

The shame of 40 000 missing education certificates

Graduates are being left in the lurch by a higher education department that is simply unable to deliver the crucial certificates proving their qualifications - in some cases dating back to 1992

The living nightmare of environmental activists who protest mine expansion

Last week Fikile Ntshangase was gunned down as activists fight mining company Tendele’s expansions. Community members tell the M&G about the ‘kill lists’ and the dread they live with every day

More top stories

Fifteen witnesses for vice-chancellor probe

Sefako Makgatho University vice-chancellor Professor Peter Mbati had interdicted parliament last month from continuing with the inquiry

Constitutional Court ruling on restructuring dispute is good for employers

A judgment from the apex court empowers employers to change their workers’ contracts — without consultation

Audi Q8: Perfectly cool

The Audi Q8 is designed to be the king in the elite SUV class. But is it a victim of its own success?

KZN officials cash in on ‘danger pay for Covid-19’

Leadership failures at Umdoni local municipality in KwaZulu-Natal have caused a ‘very unhappy’ ANC PEC to fire the mayor and chief whip
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday