OPEC on Thursday warned the European Union that too-low oil prices could “break the momentum” of upstream investment and threaten future supply security, according to a joint statement issued after a regular ministerial meeting between the two sides in Brussels.
European energy commissioner Gunther Oettinger stressed in his opening address the negative impact of very high oil prices on the world economy and warned against reduced investment that could lead to supply bottlenecks in the future.
But OPEC secretary general Abdalla el-Badri said that while OPEC was committed to ensuring that consumers had secure and stable supplies, consumers should understand the need of producers for security of demand.
Kuwaiti oil minister Hani Hussain, acting for OPEC president and Iraqi oil minister Abdul Karim Luaibi, said global economic uncertainty, particularly in the eurozone, and excessive speculation in global financial markets, were behind much of the recent oil price volatility. He said he looked forward to a strengthening of financial regulation and increased oversight of paper markets.
OPEC said it saw steady growth in world oil demand, driven mainly by developing countries, although it added that “policies aimed at alternative fuels, efficiency and higher taxes are viewed as a significant demand risk.”
It also said that the physical market continued to be supported by adequate growth in major producing regions and by “appropriate” stock levels and that, in addition, spare capacity among OPEC member countries remained effective in reducing market pressure.
The next EU-OPEC ministerial meeting will take place in Vienna in June 2013.