There is no need to panic at the recent collapse in oil prices because market fundamentals have not changed much, OPEC’s secretary general said on Wednesday.
“We do not see much change in the fundamentals. Demand is still growing, supply is also growing. OPEC is reviewing the situation,” OPEC Secretary General Abdullah Al Badri said in London, where he was attending the Oil & Money conference, an annual industry event.
“The most important thing is we should not panic,” he said.
The price of benchmark North Sea Brent crude has dropped more than a quarter from a high above $115 per barrel in June as abundant supplies of high-quality oil have swamped demand in many markets, filling stocks worldwide.
Brent was trading around $86.50 a barrel on Wednesday after reaching a low of $82.60 two weeks ago.
The Organization of the Petroleum Exporting Countries meets on November 27 in Vienna. The steep drop in oil prices has raised the question of whether the 12-member producer group will cut its output to support the market.
Badri said last month that he expected the group to lower its oil output target when it meets in Vienna, which would be its first formal output cut since the 2008 financial crisis.
OPEC now has a production target of 30 million barrels per day (bpd) and Badri suggested last month that this should be cut to around 29.5 million bpd.
Badri said on Wednesday that the cartel did not have a price target but would instead leave that to the market.
“OPEC’s average price will still be $100 at the end of this year so we are fine for 2014,” he said. “The fundamentals do not reflect this low price.
“OPEC does not have a price target. We must let the market settle down.”
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