Text size:

  • Small
  • Normal
  • Large
Opec nations are facing stiffer competition from rising North American production. Above, an oil pump in Bahrain. Hasan Jamali / AP Photo
Opec nations are facing stiffer competition from rising North American production. Above, an oil pump in Bahrain. Hasan Jamali / AP Photo

Opec warning of $150 oil price if member countries cut investment

Abdalla El Badri, the secretary general of Opec, warned that oil prices could top $150 if the oil exporter’s group stops investing.

Oil prices could top US$150 if Opec countries stop investing in new capacity, warned the head of the oil exporters’ group.

Although the market was currently well supplied, said Abdalla El Badri, the secretary general of Opec, his comments underlined the group’s importance in global markets. OPEC faces increased competition from rivals reaping the benefits of fracking technology, allowing long-time clients, such as the United States to decrease crude imports.

“While recent developments in the US have been transformative for its energy industry, we need to see how sustainable this type of production is in the longer term,” he said at a forum hosted by Gulf Intelligence in Muscat.

“Tight oil wells in the first year witness steep decline rates. It means that operators need to ‘drill, drill, drill’ just to maintain production.”

Opec will have to ramp up production from today’s levels of around 30 million barrels per day (bpd) to 37 million bpd by 2018 to make up for declines in North American production, said Mr El Badri.

In the short term, Opec producers are forcing themselves to undergo a self-examination as rising production in North America negates the need for some of their exports.

Non-Opec producers, led by shale oil developers in the US and Canada, are projected to boost output by 1.7 million barrels per day to 56.4 million next year, according to the International Energy Agency, the Paris-based watchdog.

Next week Abu Dhabi’s Emirates Center for Stretegic Studies and Research is to host a forum on what unconventional fossil fuels mean for the region.

“Let me stress here that this is a welcome development,” said Mr El Badri. “It adds depth to global supply, aids market stability and provides further proof to consumers that the world is not running out of oil. We hear very little talk of ‘peak oil’ today.”

An oil price between $100 and $110 a barrel was “acceptable” to producers and consumers alike, he said. Brent crude was trading slightly up yesterday at $109.97 in London.

“The economy remains the major worry, particularly in the short and medium term,” said Mr El Badri, pointing to the US, Europe and China.


Back to the top

More articles

Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.


To add your event to The National listings, click here

Get the most from The National