- The Organization of the Petroleum Exporting Countries (OPEC) may need to cut output in September if crude demands continue to fall, Algeria's energy and mines minister, Chakib Khelil has said in a statement.
The OPEC which next meets on 9 September to reconsider its policy, said it will reduce production by 4.2 million barrels per day from last September's output. OPEC delivered an estimated 80 percent of its promised cuts early this year. Compliance has since fallen to about 70 percent, but Mr Khelil said it was good.
Mr Khelil, said he expected stocks would fall to a “comfortable” 52 days of future demand next year.
He said, the oil market was not reflecting fundamentals of supply and demand, and a rally that took crude to a peak above US$73 a barrel late last month was driven by expectations that the global economy would soon rebound.
Mr Khelil predicted crude would trade between $65 and $70 for the rest of this year, but could rise to $90 next year, once excess supplies have been absorbed.
“We know prices are going to reach their equilibrium level with the cut in the stocks,” he said, adding, “Once the economy picks up, we are going to see prices converge to the equilibrium price of $90.”
Algeria is the third-smallest oil producer among OPEC’s 12 members.
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