The Organization of the Petroleum Exporting Countries (OPEC) President, Suhail al-Mazrouei, on Wednesday, said that volatility in the crude market was undesirable.
He said OPEC preferred a more stable price environment, speaking after crude had its biggest one-day drop in two years.
OPEC and other large producers are working on a long-term plan to build spare capacity that would cushion the market from unexpected outages, he said.
When Libya reopened key oil exporting ports on Wednesday, global oil prices fell sharply, with benchmark Brent futures plunging 6.92 percent, the steepest one-day drop in two years.
“Fluctuation is not good and we do not like to see lots of fluctuation in the prices,” Al-Mazrouei said, speaking to Reuters on the side-lines of a Canada-United Arab Emirates Business Council event in Calgary.
Tripoli-based Libya National Oil Corp said on Wednesday four export terminals were being reopened after a standoff that had shut down most of the OPEC member’s oil output.
Libyan oil production has fallen to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February following port closures in late June, the NOC said on Monday.
The fluctuations will continue as long as there is no long-term plan for production, Al-Mazrouei said.
“OPEC and non-OPEC are working on this long-term plan for market stability,” he said. While the group cannot order countries to invest to increase production, Al-Mazrouei said his presence in Canada was aimed at boosting investment in oil exploration and production.
“I am confident that we have enough spare capacity to meet the target that OPEC and non-OPEC have taken,” he said.