Dubai: The rise in oil supplies on global markets does not justify the sharp drop in crude prices, a top OPEC official said today, arguing speculation might be a contributor. "We want to know the main reasons that have led to such a drop in oil prices," said Abdalla Salem el-Badri, secretary general of the Organisation of the Petroleum Exporting Countries.
"When we look at supply and demand, there is a rise (in supply) but only a modest one that should not have led to this 50-per cent drop," he told reporters at a conference in Dubai. "Speculation is strongly contributing to pushing prices down," he added. The OPEC oil cartel decided last month to maintain its production level despite pleas by some producers to cut output in order to curb the price drop.
Oil prices tanked to new five-year lows on Friday after a gloomy crude demand downgrade from the International Energy Agency (IEA) and more weak economic data in China. US benchmark West Texas Intermediate for January delivery plunged to USD 58.80 per barrel - the lowest level since May 20, 2009 - having already closed under the psychological level of USD 60 on Thursday.
Brent crude for January meanwhile slipped to USD 62.75 in morning London deals, striking a low point last witnessed on July 16, 2009. The oil market - which has shed almost 50 per cent since June - plumbed the latest lows after the Paris-based IEA slashed its 2015 demand outlook, despite plunging prices.
