Kuwait says oil prices 'stuck' at $65, unless OPEC changes it mind

Oil prices will stay at about $65 a barrel for at least half a year until OPEC changes its collective production or world economic growth revives, said the head of Kuwait Petroleum Corp.

Oil is trading in a bear market as the US pumps at the fastest rate in more than three decades and demand growth slows. OPEC decided on Nov. 27 to maintain its output target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010.

Brent crude for January delivery was down 28 cents at $65.91 a barrel by 1447 GMT after falling as low as $65.29, its weakest since September 2009. Brent dropped 4.2 percent or $2.88 on Monday in its third-largest one-day loss this year.

US crude was down 7 cents at $62.98 a barrel, after hitting $62.25, its lowest since July 2009. It fell 4.2 percent or $2.79 on Monday.

“Oil prices will stay around the current level of $65 for six or seven months until OPEC changes its production policy, or recovery in world economic growth becomes more clear, or a geopolitical tension arises,” Nizar Al-Adsani, chief executive officer of the state-run company, said Monday at a conference in Kuwait City.

Crude prices have declined about 40 percent from a June peak amid overproduction and sluggish growth in consumption. Saudi Arabia led OPEC’s decision to maintain rather than cut output last month in Vienna, citing the threat US shale presents to the group’s market share, Iranian Oil Minister Bijan Namdar Zanganeh said on Nov. 28. Brent was 61 cents, or 0.9 percent, higher at $66.80 a barrel at 1:15 p.m. in London.

A breakdown in OPEC solidarity or a price war among producers for market share will lead to an “enormous price-dive shock,” Mohammad Sadegh Memarian, the head of petroleum market analysis at Iran’s Oil Ministry, said Tuesday at a conference in Dubai. Amrita Sen, chief oil market analyst of Energy Aspects Ltd., a London-based consultant, said at the same industry event that supply and demand don’t warrant a price as low as $60. Iraq deepened the discount for its Basrah Light crude next month to customers in Asia to the greatest in at least 11 years, following Saudi Arabia’s lead as Middle Eastern producers seek to defend market share. Iraq set the discount at $4 a barrel below the average of Middle East benchmark Oman and Dubai grades, according to the country’s Oil Marketing Co.