Era of cheap oil over, says Kuwait official

Manama: The era of cheap oil is gone forever, a Kuwaiti official said.

“Prices will never [again] go under the $40 per barrel mark,” Hani Hussain, Kuwait Petroleum Corp’s chief executive, told Gulf News in an interview yesterday.

Hussain spoke on the sidelines of the 14th Middle East Oil and Gas Show which opened yesterday in Bahrain. Prime Minister Shaikh Khalifa Bin Salman Al Khalifa welcomed participants. “We know there is huge demand for crude oil. This has pushed prices higher than most of us anticipated,” Hussain said.

He cited economic growth by “big consumers” such as China, Brazil and the United States as one important reason. “Another is the continuing cold weather in many consuming countries.”

The Paris-based International Energy Agency expects world oil demand to grow 1.81 million barrels a day, bringing its forecast for average daily demand to 84.3 million barrels.

The Organisation of Petroleum Exporting Countries (Opec) will, however, work to ensure a balanced market, Hussain said.

“There is sufficient supply. Raising the output to meet increasing demand has always been a goal of Opec’s,” he said.

Opec may agree at its meeting this week to allow members informally to pump above official oil quotas to cool scorching prices, the group’s president said yesterday in Kuwait.

“Opec will work to stabilise prices either by maintaining the ceiling as it is now or allowing overproduction to continue like it did in 2004,” Shaikh Ahmad Al Fahad Al Sabah, also Kuwait’s oil minister, told reporters at the parliament.