- A sharp decline in oil prices from record high earlier this month is only temporary, the Chairman of Libya's National Oil Corporation Shokri Ghanem said.
Oil has dropped from 11 July record high of US $147.27 a barrel to around US $121 a barrel on lower demand since May this year. It rose again by US $5 on Wednesday, amid US announcement that its supplies were down by 3.5 million barrels.
Shokri Ghanem said despite a sharp drop in prices, there is a hope for rebound. He however said if the trend continues, it will be a cause for concern, especially for a country like Libya whose economic base depends on oil.
Some members of Organization of the Petroleum Exporting Countries (OPEC) have expressed concern about sharp decline in oil prices.
OPEC members will meet September 9 in Vienna to review the cartel's output maximisation. Mr Ghanem said it is too early to speculate what OPEC will decide upon regarding a decline in oil prices.
"At this stage, we do not know because the market is sending mixed signals," he stated, adding that OPEC is unsure whether the market oversupplied.
Libya's output is expected to drop by 145,000 barrels per day for at least another month, longer than previously thought, due to maintenance on a pipeline and work at the al-Jurf field. He said work on the pipeline from Waha will take another month at least, lowering output by 100,000 barrels per day.
"The maintenance is still going on and it will take another month or two," Ghanem said.
The President of OPEC, Chakib Khelil, has ruled out the possibility of a rise in crude output, indicating that OPEC should not consider cutting output.
OPEC, the source of two in every five barrels of oil, has mostly blamed factors such as speculation and political tension in the Middle East for oil's record run, rather than a lack of supply.
But since oil hit its record, OPEC and others have lowered forecasts for world oil demand, and reports from tanker tracking consultants have estimated that OPEC production is rising, suggesting a more comfortable supply and demand balance.
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