Venezuela casts doubt on 'success' of OPEC strategy

Del Pino: What is going to happen?

VIENNA - Venezuela's oil minister on Wednesday cast doubt on suggestions that OPEC's strategy was behind a recent recovery in the price of oil to $50, saying it was due to other, one-off factors.
"We don't agree," Eulogio del Pino told reporters in Vienna, a day before the 12-member Organization of the Petroleum Exporting Countries holds its bi-annual meeting in the Austrian capital.
"It's not the situation of the market, it's some circumstances," he said. "When those circumstances are removed, what is going to happen?"
Traditionally OPEC, which pumps around a third of the world's crude, has collectively cut back or increased output in an attempt to manage the volatile price of oil.
But in the most recent drop, which has seen oil tumble from over $100 in 2014 to close to $25 in January, the cartel -- driven by kingpin Saudi Arabia -- has changed tack.
Instead of reducing output, OPEC has kept the oil flowing in order, experts say, to keep hold of market share by squeezing competitors -- particularly US shale oil producers -- that have higher costs.
Although it has taken some time, straining even Saudi Arabia's finances, the strategy appears to be bearing fruit, with non-OPEC output on course this year to fall sharply.
The price, meanwhile, last week touched $50 for the first time in six months, making OPEC -- riven by rivalry between Saudi Arabia and Iran -- breathe easier.
Suhail al-Mazrouei, United Arab Emirates oil minister, said late Tuesday that he expected 2016 to be "the year of correction".
"The rules of the market, which is the supply and demand, are working," he told reporters in Vienna.
Del Pino noted however that recent months have seen factors that have reduced supplies, such as strikes in Kuwait, wildfires in Canada, disruption in Nigeria and lower output in Colombia.
He also said that he was in favour of Al? Rodr?guez Araque, currently Venezuela's ambassador to Cuba, becoming the next OPEC secretary general, a post he held from 2001-2.
The current secretary general is Abdalla El-Badri, a Libyan. He was due to step down in 2012 but has stayed in place because OPEC has been unable to agree on a successor.
Other candidates include Nigeria's Mohammed Barkindo and Mahendra Siregar of Indonesia.