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Abu Dhabi, UAEFriday 14 December 2018

Opec responds to Trump tweet, saying it does not set a 'price object'

The US President alleged in a tweet late Friday that the exporters' group had engineered artificially high prices

Opec secretary general Mohammed Barkindo says the group was in the same boat as US producers. (Khushnum Bhandari/ The National)
Opec secretary general Mohammed Barkindo says the group was in the same boat as US producers. (Khushnum Bhandari/ The National)

Opec does not target a specific price for oil, the organisation's secretary general said in response to a tweet by Donald Trump that the exporters’ group manipulated prices. US President Donald Trump tweeted on Friday that Opec had kept prices “artificially very high”, in reference to the recent rally of Brent crude above $70 per barrel in the wake of tensions in the Middle East.

Speaking to reporters on the sidelines of Opec’s monitoring committee ministerial meeting in Jeddah, Mohammed Barkindo said: “We do not have any price object, not as Opec and not in this joint endeavour with non-Opec. Price is not our objective and our objective remains restoring stability on a sustainable basis and in the interest of not only us as producers but also us as consumers."

Brent was valued at a three-year high of $74 per barrel on Thursday. The price spike comes amid a global effort by Opec producers, led by Saudi Arabia, and sovereign producers outside the group, led by Russia, to curb output levels by 1.8 million barrels per day since the beginning of 2017. The producers, who plan to forge a longer-term alliance by the end of 2018, have since extended the production restrictions through to the end of the year, although that decision will be subject to review in June.

One of the concerns for the Opec and Russia-led alliance is a resurgent US shale sector, which is poised to flood the market in the advent of higher prices. In 2014, Opec kept up production levels in an apparent move to squeeze US players out of the market, even as oil prices fell from $100 highs of 2014 to half that level a year later.

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The Opec chief brushed aside talk of bad blood, saying the US producers were in the same bracket as the countries in his group.

“There are no barriers as such between us as Opec and non-Opec and between this partnership between independent producers, [we are] all producers of oil, even short cycle producers from the shale basins, long cycle producers whether US companies or other IOCs [international oil companies]. We’re all in the same boat,” said Mr Barkindo.

He added that the olive branch to US shale producers remained extended. The two sides met at the Cera Week gathering of global energy executives in Houston in March and have been invited to Opec’s mid-year meeting at its headquarters in Vienna in June.