Oil prices may drop to as low as the mid- $20s a barrel unless OPEC takes action to stabilize the market, Venezuelan Oil Minister Eulogio Del Pino said.
Venezuela is urging the Organization of Petroleum Exporting Countries to adopt an “equilibrium price” that covers the cost of new investment in production capacity, Del Pino told reporters Sunday in Tehran. Saudi Arabia and Qatar are considering his country’s proposal for an equilibrium price at $88 a barrel, he said.
OPEC ministers plan to meet on Dec. 4 to assess the producer group’s output policy amid a global supply glut that has pushed down crude prices by 45 percent in the last 12 months. OPEC supplies about 40 percent of the world’s production and has exceeded its official output ceiling of 30 million barrels a day for 17 months as it defends its share of the market.
“We cannot allow that the market continue controlling the price,” Del Pino said. “The principles of OPEC were to act on the price of the crude oil, and we need to go back to the principles of OPEC.”
Oil slumped Monday amid a broader commodity rout as the dollar gained, making commodities priced in the greenback more expensive. Brent for January settlement fell as much as 62 cents, or 1.4 percent, to $44.04 a barrel on the London-based ICE Futures Europe exchange. The West Texas Intermediate contract for the same month, the U.S. marker grade, lost as much as 2.2 percent to $40.96 a barrel.
OPEC ministers will meet informally on Dec. 3 in Vienna, a day before the group’s formal session, he said.
Venezuelan President Nicolas Maduro is scheduled to meet Russian President Vladimir Putin in Tehran on Monday to work together on oil prices, he said on state television last week. Russia, which isn’t a member of OPEC, is facing competition in Europe after Saudi Arabia reduced pricing for buyers in northwest Europe and started selling in established Russian markets such as Poland.
Venezuela lobbied Russia last year as it sought to coordinate action with non-OPEC producers to halt the collapse in oil prices. Global supply and demand is best balanced by the market, Russian Energy Minister Alexander Novak said Saturday in Tehran.