VIENNA, Oct 13 (KUNA) -- The Organization of the Petroleum Exporting Countries (OPEC) is monitoring anxiously falling oil prices at global markets and relevant effects on member states' development plans.
The decline in global oil prices reached 15 percent in the last three years, the lowest level in three years.
Although some OPEC states, such as Venezuela, desire to hold an extraordinary ministerial meeting as an attempt to minimize the decline in oil prices, some OPEC officials rule out the possibility of holding such a meeting as the cartel is set to hold its ordinary meeting on November 27 in Vienna.
The aim of the ordinary meeting is to discuss the latest developments of oil prices and market's needs - supply and demand.
The OPEC thinks the low demand, the increase in non-OPEC member states' oil production and the policy of speculation in the market are prominent reasons for the decline in oil price.
However, some analysts in the oil markets said that the decline in oil price happens primarily because of the gradual rise in the US dollar vis-a-vis main foreign currencies since 2014 and its rapid rise during the last weeks.
Yet, they said that it is difficult to expect whether the US dollar will maintain its upward trend.
Analysts confirm that even if the OPEC, which has 12 countries and secures one third of world's crude oil, could decide in the ordinary meeting to regain a balance between supply and demand of oil, it will be unable to stop the appreciation of the US dollar.
The US dollar is expected to see a further rise against main foreign currencies in the upcoming period, analysts noted.
With the start of the recovery of US economy, the exchange rate of the US dollar is expected to experience a rise, and this will consequently affect oil prices which are measured by the price of the US dollar.
According to analysts, the continuing appreciation of the US dollar will not be in favor of the US economy in the long run as this move will lead to a decline in US exports and an increase in imports. This move also will cause a deficit in the US balance of trade.
The International Energy Agency (IEA) expected a high increase in the global demand of oil in the fourth quarter of 2014, reaching 1.2 million barrels per day.
Actually the oil consumption has so far reached 990,000 barrels because of the decline in growth in some countries such as the US and China which are major oil consumers.
Weakness in the global economic performance is expected to continue especially in European Union countries and Japan and this will affect oil consumption.
These factors will lead to an increase in oil price but the supplies of non-OPEC member states will prevent the return of price to its previous levels above USD 100 per barrel. (end)