OPEC will need to “step in” amid further declines in oil prices, which are fair at US$70 to US$80 a barrel, according to the group’s second-biggest producer.
The organization could still hold back from intervening in the market for one or two years, Iraqi Minister of Oil Adel Abdul-Mahdi said in an interview.
Brent oil dropped about 20 percent since OPEC decided to maintain output at its meeting in Vienna last month.
Global oil supply is growing as the highest US output in at least three decades led to a glut that Qatar estimates at 2 million barrels. Saudi Arabian Minister of Petroleum and Mineral Resources Ali al-Naimi said on Sunday that high-cost producers will have to make cuts if oil prices keep falling while United Arab Emirates Minister of Energy Suhail al-Mazrouei urged producers from outside OPEC to trim output. Iraq’s budget for next year assumes a US$60 per barrel oil price.
“If prices keep falling to very low levels where the whole equation is not balanced, then definitely OPEC has to step in,” Abdul-Mahdi said. He did not say if that would mean cutting production.
OPEC’s decision to hold production was taken after al-Naimi said the 12-nation group must protect its market share and let prices fall to trim output elsewhere, Abdul-Mahdi said.
“We accepted the Saudi theory to correct the situation in the market as it made sense to all of us,” he said.
The “fair price” of oil that was US$100 to US$105 a barrel is now closer to US$70 to US$80 a barrel, Abdul-Mahdi said.
The Iraqi Cabinet two days ago approved a budget based on US$60. Global crude prices dropped about 45 percent this year, heading for the biggest annual decline since 2008.
Saudi Arabia does not plan to pump less “whatever the price is,” al-Naimi told the Middle East Economic Survey in report published on Monday.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is