US forecaster DRI projects a slow rise in oil prices in the first half of 1994 that will still leave the market well below OPEC target levels.

The company foresees the average price of OPEC crude oil falling to a low of $12.90 a barrel in January and February. This will be followed by a slow rise to an average of $14.10 a barrel in May 1994. DRI estimates OPEC crude oil production to have averaged 24.67 million barrels a day (b/d) in December. It forecasts this rising marginally in January and February to 24.82 million b/d in March.

OPEC output is projected to average more than 25 million b/d in April and May. DRI forecasts non-OPEC crude oil production rising steadily to an average of 36.5 million b/d in May 1994. As a consequence, world crude oil production is projected to rise to 61.74 million b/d in May. This compares with 60.83 million b/d estimated in December.

The depressed oil price was blamed on rising North Sea oil production and quota violations by some OPEC states, according to a briefing by Kuwait oil ministry officials to the Kuwait parliament’s finance and economic affairs committee on 19 December. They also said the possibility of Iraq returning to the oil market was putting pressure on prices, Kuwaiti newspapers reported.

Oman’s Petroleum & Minerals Minister Said Bin Ahmad al-Shanfari was planning to travel to Russia at the end of December to seek oil production restraint. He was also expected to visit Syria and Egypt. Oman has announced a cut in oil production of at least 5 per cent in January (MEED 24:12:93).