The OPEC oil producing cartel will continue cutting output until the price of crude stabilises, its president Chakib Khelil said on Friday.
Drivers stage a protest in the streets of Manila on December 19, 2008, demanding that diesel fuel prices be brought down further despite almost weekly reductions in fuel prices. (AFP Photo)
"We will continue this reduction until the price will stabilise," he told reporters in the sidelines of a conference of oil ministers in London, two days after OPEC had agreed to cut output by 2.2 million barrels a day.
OPEC to cut output until prices stabilise: presidentSaudi Arabian Oil Minister Ali Ibrahim al-Nuaimi suggested on Friday that production levels alone did not drive oil prices, as prices fell despite an output cut by OPEC this week.
Saudi Arabian Oil Minister Ali Ibrahim al-Nuaimi suggested on Friday that production levels alone did not drive oil prices, as prices fell despite an output cut by OPEC this week.
Oil prices in New York hit the lowest level for four and a half years despite OPEC's decision Wednesday to cut production sharply in a bid to firm up prices.
He was speaking at a meeting of 27 oil producing and consuming nations convened in London and attended by figures including British Prime Minister Gordon Brown and OPEC chief Abdalla Salem El-Badri.
"I continue to believe that non-fundamental factors continue to impact oil prices, both upwards and downwards," al-Nuaimi told the meeting.
"To illustrate, consider the rapid and substantial financial deleveraging which has resulted in sharp price declines not just for oil and commodities but for nearly all financial instruments."
He said that at the time of record highs, issues such as "the speculative investments into commodities" had fuelled high prices.
His comments came as British Energy Secretary Ed Miliband voiced support for new rules to force greater disclosure by traders in the oil futures market -- blamed by some for contributing to soaring oil prices.
The Saudi Arabian minister also reiterated the support of his country -- the world's biggest oil producer -- for an oil price around 75 dollars per barrel which he said would be "fair and reasonable".
"It is the price that marginal producers need to maintain investments sufficient to provide adequate supplies for future oil consumption needs," he said.
"When oil is priced lower, such as it is now, there will be less investment and less future supply.
"Eventually, this scenario is followed by a surge in prices, as supplies would not be sufficient to meet growth in consumption levels.
"The world therefore would see extreme swings in prices to the detriment of producers and consumers."