Algeria sees oversupply driving oil prices down
Thursday, 05 July 2012 | 00:00
Global oil prices are likely to fall due to an oversupply and weak demand, OPEC member Algeria said on Wednesday, a day after backing an emergency meeting of the organisation in the event of renewed declines in crude prices.
"The market is unbalanced. This is due to two things: low demand compared to normal and an increase in supply since the beginning of the year," Energy and Mines Minister Youcef Yousfi told state radio.
"These imbalances can cause prices to fall. We are monitoring the situation every day."
Algeria urged OPEC's biggest producer Saudi Arabia to cut back on oil production at a June meeting of the Organization of the Petroleum Exporting Countries.
Crude oil prices fell back on Wednesday, as investors returned their focus to the grim economic backdrop and took profits from the gains of previous sessions.
Oil had risen on Tuesday, supported by expectations of more monetary stimulus, but Brent crude has since fallen 49 cents to $100.18 per barrel and U.S. crude has fallen 55 cents to $87.11 a barrel.
Prices in the second quarter posted their biggest quarterly drop since the 2008 financial crisis, causing concern among some OPEC members.
Yousfi said on Tuesday Algeria would seek an extraordinary OPEC meeting if prices resumed their decline.
That came after Iran urged OPEC's secretary general at the weekend to convene an emergency meeting.
Iraq has also called on OPEC to cut supply, while Venezuela requested an emergency meeting of the producer group in the third quarter of this year if prices do not recover.
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