Kuwait's Governor for OPEC Nawal Al-Fezaia said Wednesday that geopolitical factors and encouraging economic figures coming from Germany would help oil prices reclaim its USD 100 per barrel level in third quarter of 2014.
Oil prices will rally past USD 100 level again as the geopolitical instability in the Middle East and some African countries as well as the encouraging growth of German economy, Europe's biggest economy, are pushing prices up, Al-Fezaia told reporters on the sidelines of the 14th sessions the GCC oil ministries undersecretaries.
Al-Fezaia, also Assistant Undersecretary for Economic Affairs at Kuwait's Ministry of Oil, said that the market is oversupplied currently but in the coming period it will see a growth in demand as winter season approaches and a decline in supplies with planned maintenance of several Western refineries.
Thus, oil prices will restore USD 100 level in the third quarter of 2014, she forecasted.
Al-Fezaia argued that the current drop in oil prices is driven mainly by a significant increase in Libya's oil production, US production of shale oil and the low market demand due to the usual retreat in oil production consumption in summer.
Asked about if OPEC plans any cut in output ceiling to strike a balance on supply and demand on the market and help restore previous prices, Al-Fezaia said that it is premature to talk about plans for output reduction.
Acting Undersecretary of the Kuwait Oil Ministry Ali Bin Sabt echoed a similar view.
"We are not concerned about the prices drop and we expect that the prices would return to its previous levels soon. We are optimistic" Bin Sabt told reporters.
He underlined the importance of GCC coordination in the economic aspects of their petroleum policies.
"Gulf economies are based on oil revenues, thus oil prices drop would impact it," he said, adding that "Despite of that, were are not concerned." According to oil prices announced by Kuwait Petroleum Corporation Wednesday, Kuwait crude oil per barrel (pb) went up Tuesday two cents to USD 96.32 compared to USD 96.30 the day before.
Meanwhile, in the international oil market, the prices of future Brent mix oil contract went down to its lowest in 16 months because of the slow demand on crude oil In Europe and China markets.
American crude oil prices also went down to their lowest in seven months because of the US dollar exchange rate going up and due to the abundant supplies.