OPEC Won't Cut Production Despite of Falling Price
Brent crude oil continuously fell for three days. However, the OPEC members do not want to cut production even if the oil prices have fallen into a bear market.
In London futures markets, oil prices fell as much as 0.7 percent today. Suhail Al Mazrouei, energy minister of OPEC, said, “The oversupply of the global market is not caused by us.”
According to the forecast of Bloomberg News Agency, the US crude oil inventories have increased by 1.1 million barrels within the week, with continuous growth for 6 weeks. Impacted by the speculation that the growth of global oil supply will be faster than that of demand, Brent crude oil has fallen nearly by 30% compared with the high point in June.
The major OPEC countries boycott production cuts and reduced export prices to the US. Crude oil production
of OPEC members accounts for 40% of global output. OPEC members plan to hold a meeting on November 27 in Vienna.
RicSpooner, chief strategist of CMC Markets, said to Bloomberg that OPEC was the key at present. Huge price fluctuations mean that this meeting will be very important. Market believes that OPEC will not take any action or the action taken will be insufficient to bring any substantive impact.
OPEC's largest oil producer Saudi Arabia and Kuwait have already hinted that they are unlikely to reduce production. OPEC member Libya, Venezuela and Ecuador called for action to prevent further decline of oil prices. Anibal Octavioda Silva, deputy minister of Angolan Petroleum Ministry, said yesterday that the OPEC had not yet reached agreements on production cuts.
Data collected by Bloomberg show that OPEC oil production was 30.974 million barrels per day in October, which was higher than the 30 million barrels of target set in January 2012.