By Osama Jalal
KUWAIT, March 27 (KUNA) -- The wise policies of Saudi Arabia and Gulf states, particularly in view of military operations in Yemen, have added to the stability of the oil market, preventing oil prices from spiking to over USD 70 a barrel, a Kuwaiti energy analyst said on Friday.
Oil analyst Hajjaj Bu Khadhour told KUNA that the rise in the price of oil yesterday by about 5 percent as a result of the military operations in Yemen was ordinary under such circumstances, saying a spike to USD 70 or USD 80 would have been more in line with the tense conditions in the region.
He said military operations in an oil-sensitive region like the Arabian Gulf are bound to affect the price of oil, since almost a quarter of the world's oil production, namely 20 million barrels a day, emanate from it.
Emphasizing that Saudi Arab and Gulf states consider price stability of paramount importance, he said these states have enormous oil reserves kept in complete safety in a number of consumer countries, among them China and Japan, which can take up any slack in availability of oil on the international market due to any contingency, including armed conflicts such as the one in Yemen.
He stressed that Gulf countries have securely put in place workable emergency plans in the event of an interruption in the supply of oil on the international market, noting that over the short term there will be gradual increments in the price of oil to reach USD 60-65 (for the Brent Mixture), particularly if the military operations in Yemen do not go on for long. He predicted that normal prices, unaffected by unforeseen circumstances like armed conflicts, would prevail by the end of this year.
Moreover, he predicted that by the start of next year oil prices might reach about USD 70 a barrel and go beyond that in a normal trajectory of measured increments. (end) osj.ajs