The UAE has quashed talks of a possible unscheduled meeting of Opec members after Nigerian oil minister said a couple of members have requested a gathering.
Oil prices are hovering around $30 a-barrel to a near 12-year and have shed almost three-quarters of their value since mid-2014 due to oversupply.
Present market conditions support an emergency meeting to review whether Opec should change strategy, Nigerian Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu told reporters on the sidelines of an energy conference in Abu Dhabi on 12 January. He didnt specify which Opec members wanted a meeting and said any such gathering would be in February or March. The oil cartel is scheduled to next meet on 2 June.
The UAEs Energy Minister Suhail bin Mohammed al-Mazroui, however, later told the same conference the current Opec strategy was working, adding that time was needed to allow this to happen perhaps between one and one-and-a-half-year.
Im not convinced OPEC alone can change or can solely unilaterally change this strategy just because we have seen a low in the market, new Agency Reuters quoted Al-Mazroui as saying.
While the first half of 2016 would be tough for the oil market, there would be a gradual recovery later in the year, aided by an expected drop in non-OPEC production, he added.
Opec is waging a price war, led by Saudi Arabia, against the US shale producers to protect its share of the global oil trade. It has continued the strategy of maintaining production levels, instead of reducing supply to allow prices to recover. The supply glut is likely to worsen in 2016 by the return of Iranian supply to the market, once Western sanctions are lifted.
I think all the members including Iran have the right to increase their production. I dont think we are going to restrict anyone, Mazroui said.
Analysts have downgrade their forecasts in for oil prices in recent days, with Standard Chartered saying prices could drop to $10 a barrel.