$100 Brent Oil Price is Comfortable Level for Kuwait

Kuwait Petroleum Corp.’s head recently told KUNA, a state news agency, that the crude oil price per barrel at $100 is a good level for both consumers and producers.

Chief Farouk Al-Zanki of KPC told KUNA that Kuwait is happy with the region’s $100 oil price since they see it as acceptable for both consuming and producing nations.

He gave his comments as dealers remarked that oil dropped to another low level in many months due to poor data from the United States, the top consumer of global crude. Moreover, the drop in oil prices is caused by the dollar’s increase with concerns of Spain’s possible bailout.

Moreover, the KPC said that the output of Kuwait remained the same, at around 3 million barrels daily, versus a total output capacity of around 3.2 million barrels.

Zanki further mentioned tensions surrounding the nuclear program of Iran and the uncertainty in Europe’s economy as the two factors that influence day-to-day fluctuations in crude oil price.

Moreover, the chief said that usual factors like demand and the level of foreign exchange no longer have an influence in oil price.

In another KUNA report, the KPC unit of Kuwait Oil Company (KOC) said that it made plans to put up three collection centers for oil within the state to increase crude output by almost 300,000 barrels daily. Designs are being made for the project that will be established in the northern region of the country, although no dates have been given yet, said Chairman Sami Al-Rushaid of the KOC. Overall, Kuwait said that it aims to produce around 4 million barrels daily by the year 2020.

Brent North Sea crude price for July delivery fell to its lowest level since the 5th of October at $101.27 a barrel. West Texas Intermediate (WTI) crude prices for July delivery also dropped to a crude oil price per barrel of $85.86 which last happened in the 24th of October.

Crude oil prices declined moving to high losses in the Wall Street as a surprisingly huge increase in crude oil supplies showed severe concerns regarding the poor oil demand of the U.S., said Myrto Sokou, an analyst of Sucden. Sokou further added that the relatively weak economic data of the United States weighed more on market sentiment and minimal risk appetite.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

Facebook Twitter LinkedIn Google+ YouTube