LONDON (Dow Jones)–OPEC producers, including from the Gulf, said Friday they saw no immediate need to cut production despite oil prices dropping below $100 a barrel–the price the organization sees as ideal.
The remarks suggest key oil producers that have boosted production in recent months won’t start trying to push prices higher unless they continue falling for a sustained period.
“Nobody is expecting a crash,” one Gulf delegate with the Organization of Petroleum Exporting Countries said. “The fundamentals are still there,” citing tensions with Iran and an expected rebound in oil demand in the coming weeks.
“Nothing will happen until the conference” of OPEC due June 14, another delegate from a non-Gulf country said. “We are worried, but not panicking.”
To calm markets rattled by Iran supply concerns, OPEC has increased oil production well above its ceiling of 30 million barrels a day in recent months, though it eased by 170,000 barrels a day in May, according to a Dow Jones survey.
The overproduction has led to a build up in oil inventories and contributed to a drop in prices, as demand concerns replaced supply worries amid renewed fears of a euro-zone collapse.
Friday, Brent–the most commonly used futures contract–fell below $100 a barrel, reaching $97.7 a barrel at one point–its lowest level since February 2011.
Yet prices remain at an average of $117 a barrel this year–well above the $100 a barrel OPEC says strike a balance between the needs of consumers and producers.
-By Benoit Faucon and Summer Said; Dow Jones Newswires