By Rania El Gamal
Kuwait oil official sees tough times for oil in '09, lauds OPEC's output cut move.
Oil prices would have fallen to $20 a barrel without OPEC intervention but oil markets will see tough times in 2009 amid the global financial crisis, Kuwait's state news agency cited an oil official as saying on Monday.US crude has fallen over $100 to around $40 from its peak in July above $147 but has steadied since December.
"The decisions taken by OPEC in the past few months protected oil prices from a big decline," Nawal Al Fuzaia, Kuwait's national representative to OPEC told KUNA. "If it has not been for these decisions, oil prices would have reached $20 a barrel."
The Organization of the Petroleum Exporting Countries (OPEC) has agreed to cut production by 4.2 million barrels per day (bpd), about five percent of daily world supply, since September to prop up prices.
OPEC member compliance with agreed output cuts is good, Fuzaia said. "Compliance reached about 80 percent which is good," she said.
The group next meets to discuss supply policy in March, when it will weigh the impact of cuts so far with falling demand for oil from a slowing global economy. Some OPEC members have said the producer group could cut again.
Fuzaia said 2009 could be tough. "The oil market may face a difficult year in 2009... the global situation is not clear," she said.
Low prices would have a negative effect on investments in the oil sector, which could tighten supply in the future, she said. (Reuters)