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No Need For Oil Freeze If Crude Oil Sells For $45 – OPEC Governor

by on April 25, 2016
 

Widhyawan Prawiraatmadja, Indonesia’s governor to the Organization of the Petroleum Exporting Countries (OPEC), says no need for oil output freeze since oil is at $45.

Speaking in Abu Dhabi on Monday, the governor said oil at $45 a barrel was not bad and that there would be no urgency to freeze output if crude remained at that price.

“The price is $45, which is not so bad,” Widhyawan Prawiraatmadja told Reuters on the sidelines of an energy event in Abu Dhabi. If it stays that way, there’s no need to freeze output. There’s no urgency.”

He added that an oil price of $50 to $60 was “probably ideal, but still relatively cheap”.

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The oil cartel met on April 17 to decide on a freeze and the future of oil stability, only for the meeting to end in a stalemate.

Nigeria’s Ibe Kachikwu, former OPEC president, said after the stalemate that he still has hope in an oil freeze, urging OPEC to ensure that it achieves a workable consensus on the issue by bringing everybody on the negotiating table.

“We are just going to work at it. It is a supply and demand issue and we need to consult and bring everybody into the circle,” Kachikwu was quoted to have said.

“Thank God that a committee is now in place to try and work towards getting everybody on board.”

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Despite failure to reach a deal for halting oversupply, crude oil prices have been on the rise, with the OPEC basket price peaking at over $40 on Friday, April 22.

As at 10am Nigerian time on Monday, Brent crude, world benchmark for oil, was trading at $44.83 per barrel, while the OPEC basket price stood at $39.79.

Indonesia, which rejoined OPEC as its 13th member in December 2015, needs $50 crude to sustain its oil and gas industry, while Nigeria needs the price to be above $38 to fulfill its 2016 budgetary requirements.

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