KUWAIT CITY, 18 July 2004 — Kuwait’s Minister of Energy Sheikh Ahmed Fahed Al-Sabah said he expects oil prices to drop from around $40 per barrel to between $28 and $32 per barrel, a South Korean newspaper reported yesterday.
Oil prices soared on Friday to their highest level in six weeks to above $41 per barrel. Traders attributed the rise to a new bout of speculation on international oil markets and worries about supplies.
The Kuwaiti minister told The Korea Times newspaper that as soon as the speculation died down, prices would also dive, to what he called a more stabilized level.
“This is not to say, however, that prices will easily go as low as below 20 dollars per barrel. Overall demand is showing a rising trend, largely boosted by China’s huge economic growth that has made the nation the largest oil buyer in the world,” said Al-Sabah.
“Thus we expect prices to stabilize to the range of $28 to $32 per barrel,” he added, in an interview posted on the newspaper’s website and carried by the Kuwait News Agency (KUNA). Political unrest in the Middle East was also a contributing factor to the recent rise in prices, the minister said, noting that the Organization of Petroleum Exporting Countries (OPEC) was pro-actively working to stabilize the market.
OPEC this past week agreed to release another 500,000 barrels per day onto the market as of Aug. 1, in line with a decision taken by the organization in June to raise its production in a two-tier stage by 2.5 million barrels per day bringing its total output to 26 million barrels per day.
The Kuwaiti minister is on a four-nation Asian tour with a high-ranking delegation led by Kuwaiti Prime Minister Sheikh Sabah Al-Ahmed Al-Sabah.
The delegation left Seoul on Friday and is currently in Singapore.