$100 a Barrel Seems to be the Right Level Says Hussain Al-Shahristani

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$100 a Barrel Seems to be the Right Level Says Hussain Al-Shahristani
$100 a Barrel Seems to be the Right Level Says Hussain Al-Shahristani

$100 a Barrel Seems to be the Right Level Says Hussain Al-Shahristani

In the ongoing World Energy Congress in Daegu, South Korea, Hussain Al-Shahristani, Iraq’s Deputy Prime Minister said that the world is satisfied with current OPEC production and there is no reason to change the production targets.

He added that OPEC doesn’t need to cut output as crude at about $100 a barrel will entice marginal producers to pump more, adding supply and stabilizing markets.

Iraq’s Deputy Prime Minister also opined that OPEC would rather see more countries supplying the world with crude and $100 a barrel seems to be the right level. According to the latest data available OPEC pumps about 40 percent of the world’s crude and any decision on reducing or increasing the production will be taken in the scheduled meet in December.

Other OPEC Countries Agree With Hussain Al-Shahristani

Hussain Al-Shahristani’s views get support from Algeria’s Energy Minister Youcef Yousfi who says that the existing production is quite reasonable. A better scenario has developed in the last couple of years as non-OPEC producers led by the U.S., Canada and Kazakhstan are now boosting supplies the most.

Dependency Decreasing on OPEC Oil

Since the great energy crisis, there has been an increase in the non-OPEC oil production that has reduced the dependability in OPEC oil to a great extent. Interestingly, Iraq is not bound by an OPEC quota and currently it is exporting 2.5 million barrels a day of crude and producing 3.3 million; however, it is willing to increase it to 3.5 million barrels by the end of the year.

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Recently, whereas China became number one liquid fuel consumer, the U.S. increased its oil production to a great extent.

Iraq to Increase Crude Oil Production

Al-Shahristani is mulling a plant to raise crude-export capacity at its southern port of Basrah to 4 million barrels a day. The country has already started working towards the target and in all probabilities it will start production by the end of the first quarter the next year after completing a fourth floating terminal.

According to Al-Shahristani Iraq’s crude output will increase significantly as with its Majnoon field is going to produce 175,000 barrels a day this month. However, the plan is to increase production at Majnoon by a quantum i.e. 220,000 barrels before the end of the year. Iraq will also start crude production by the second quarter of 2014 at the West Qurna-2 field.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com