OPEC chief: Current oil prices ‘abnormal’

Crude oil prices above $120 a barrel are “abnormal” and could fall to around $78 under the right circumstances, OPEC President Chakib Khelil said on Tuesday (July 29). If the dollar continues to strengthen and the political situation (regarding Iran) improves, then the long-term prices will be about 78 dollars,” Khelil told reporters in Jakarta, adding the market was well-supplied with oil.

Crude prices have doubled over the past two years but fallen from record highs of around 147 dollars a barrel reached earlier this month. They were trading at around $125 today. “There’s a balance in the market. I would say stocks are at a good level and there hasn’t been any disruption in demand,” Khelil said.

Asked whether any members of the Organisation of the Petroleum Exporting Countries (OPEC) should cut production if oil prices continued to fall, he said: “No, I don’t think so. Why should they cut production?” “They always want to make sure there’s good supply and demand and to satisfy the demand,” he said.

Indonesia is the only Asian member of OPEC but has announced that it will not renew its membership of the oil cartel at the end of the year as it has turned into a net importer in recent years.

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