Oil: prices have hit a “low,” said one Iraqi minister – Les Echos

Oil: prices have hit a "low," said one Iraqi minister – Les Echos

The Iraqi Oil Minister Adel Abdel Mahdi, said Wednesday that oil prices had reached a “low”. For Total, prices should remain low in the first half

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Expert opinion or autosuggestion? “ We believe that oil prices have reached a bottom and it would be difficult for them to even lower ,” said Wednesday, Iraqi Oil Minister Adel Abdel Mahdi who attended energy conference Kuwait.

“We find no reason for the significant and persistent fall in prices,” he added, considering that ” Several factors will play to correct this fall . ” He said the current level of prices of black gold which dropped by more than half since June to negotiate below the 50 dollar mark ($ 48.630 Brent coast Wednesday) will force the oil weighted production costs important, especially those exploiting oil shale, to exit the market.

A prospect that would make the affairs of Iraq, second largest oil producer in OPEC after Saudi Arabia. This could indeed reduce overproduction currently estimated at 2.5 million barrels per day and foster a rebound in prices, said the minister.

Initiatives to reduce production

“ Producers high costs may go out (a market time), but they will come back “when the crude oil prices will improve, responded Mohamed al-Romhi Oil Minister of the Sultanate of Oman. He said his country was earning before nearly $ 3 billion a day, an amount that is no longer amounts to only about 1.5 billion. Result: Oman announced a 2015 budget deficit of $ 6.47 billion because of the collapse of prices.

His Iraqi counterpart stressed that initiatives were underway to try to get a drop in production. “ Venezuela takes great efforts (…) and there are contacts involving Russia and OPEC to try to reduce production ,” he added. But Saudi Arabia, leader of OPEC, and its Gulf partners have refused to do so for fear of losing market share.

Total less optimistic

Still, for now, this fall in most destabilizing exporting countries. The IMF on during the “balanced budget price” of these countries ranges from 54 dollars to 130 dollars Kuwait for Iran and Algeria, to $ 60 for Qatar, $ 77 for the United Arab Emirates, $ 79 for Ecuador, $ 98 for Angola, $ 101 for Russia and Iraq, $ 106 for Saudi Arabia and $ 123 for Nigeria.

Should we expect a rebound in oil prices (see the last note INSEE)? Not in the short term, for its part considers the French oil group Total, which decreased from 10 dollars per barrel represents a shortfall in terms of free cash flow of $ 2 billion per year. “ I think frankly that [oil] will remain at low levels for the first half 2015 ” Patrick said Wednesday Pouyanné, the new CEO of Total France 2 during Economic Forum in Davos. “ We’ll see, it depends on many parameters, what will be the behavior of a number of major producing countries including. “