OPEC members were urged on Friday by Iran to make efforts jointly to keep the price of oil from dropping any further highlighting a split in its members like Saudi Arabia who face lower pressures on budgets despite prices sliding toward just $95 per barrel.
Oil in June was $115 and its drop of nearly $20 per barrel has been pressured by concerns over the slowing demand globally and the higher supply, as output has recovered in Libya.
The oil minister in Iran Bijan Zanganeh said that considering the trend in prices is on a downward track, members of OPEC should attempt to temper the production to avoid any further instability of price.
Iran has amongst the highest needs for oil prices to remain as high as possible of the other 11 members of the Organization of the Petroleum Exporting Countries.
Iran is often supporting measures that will likely boost prices. However, Saudi Arabia as well as other OPEC members in the Gulf has thresholds that are lower.
However, the Gulf producers in OPEC, thus far remain unaffected. The oil minister from Saudi Arabia this week in New York appeared to play down the price drop, while other delegates have stopped short of price supporting action.
One delegate said he was still relaxed referring to the oil market’s outlook and current situation.
Besides a demand that has been lower than expected a key element behind the fall in price has been Libya’s recovery. Its output is now close to 925,000 barrels a day from just 200,000 this past June.
Other members of OPEC, for the most part Saudi Arabia, had pumped more informally to make up for the lower output in Libya and other shortages. OPEC sources said they might pare back extra supplies if needed to help support a price increase.
Saudi Arabia lowered its output by close to 400,000 barrels a day this past August. However, the crude supplies in the market were actually bigger.