OPEC says oil prices won't fall to $25 or lower

Abdalla El-Badri, the secretary general of the Organization of Petroleum Exporting Countries (OPEC), said it did not expect the price of oil to fall to $25 a barrel or lower.

“The price will not go to $20 or $25, I think the price will stay at where we are now,” El-Badri told Bloomberg Television on the sidelines of the World Economic Forum in Davos.

“We have seen this before, prices coming down very fast and go up very slow. But prices will rebound.”

Oil prices have endured a torrid time over the last seven months, with both Brent and West Texas Intermediate crude tumbling below $50 a barrel for the first time since May 2009.

To date, March crude prices are down 11%, while Brent crude for the same forward month has lost almost 15%.

In November, OPEC stated that it had no intention of cutting production, despite calls for a cap on output from non-member countries.

On Wednesday, Oman’s oil minister Mohammed Al-Rumhy criticised OPEC’s decision not to cut production.

“I really fail to understand how market share became more important than revenue,” he said, speaking at a conference in Kuwait City.

“We have created volatility, and volatility is one of those words that’s bad for business.”

However, El-Badri said that had the cartel cut in November, it would have to keep cutting as non-OPEC members would cut.

“Everyone tells us to cut. But I want to ask you, do we produce at higher cost or lower costs? Let’s produce the lower-cost oil first and then produce the higher cost,” he was quoted as saying by Reuters.