Kuwait minister says oil price fair at $100

An oil price of $100 a barrel is fair, and Kuwait is producing around 3.1 million barrels of crude a day, the country’s oil minister said in comments published on Tuesday.

“The fundamentals of supply and demand indicate that $100 a barrel is a fair price,” Hani Hussein told newspaper al-Rai in an interview, adding that international political tensions could send the price higher.

Brent crude fell 50 cents to $112.66 a barrel by 0755 GMT on Tuesday, down more than 5.5 percent so far in May after five days of falls. U.S. crude also fell for a fifth day, losing $1.14 per barrel to touch a low of $96.80 before recovering slightly.

Hussein said it was important for Kuwait to avoid becoming reliant on a high oil price but declined to predict future price developments.

He said he expected between seven and nine companies to make tender offers for Kuwait’s refinery projects by the end of May.

The Gulf state plans a 4 billion dinar ($14.4 billion) construction project for a new refinery and for upgrades to two others as part of its development plan.

The delayed al-Zour refinery project, which aims to process 615,000 barrels a day, would be the OPEC member state’s fourth refinery. It should go on line in 2018, Hussein said.

Hussein also said Kuwait had referred a gas development contract between Shell and state-run Kuwait Oil Co. to prosecutors for investigation after a report by an investigative committee raised questions about the deal.

“When I was reading the report of the Commission of Inquiry into the ‘Shell’ file, I found some of the things mentioned in it, and found it appropriate to send the file to prosecutors for consideration and investigation of any suspicions,” he said.

Al-Rai said Hussein had made the referral during his first days after taking office in February.

The contract, worth $800 million according to Kuwaiti media, has been under investigation since last year by a committee set up by Hussein’s predecessor after some lawmakers said the deal had not been transparent.

Hussein said he had also asked prosecutors to probe reports of diesel smuggling involving Kuwait.

Reuters