Supply and demand were no longer decisive for oil prices after other factors have become influential, including geopolitical factors, speculation, the flow of global oil reserves, the value of the US dollar, financial market developments, stocks, climate, production and exports, said Abbas Ali Al-Naqi, Secretary General of the Organization of Arab Petroleum Exporting Countries (OAPEC). In a speech on behalf of OAPEC to be delivered at the two-day Gulf Petroleum Conference and Exhibition (GPCE 2012) in Kuwait - organized by the Investors Group - he said that the events that occurred in the Arab world in the past months had no significant impact on prices. In light of the Gulf region's influence in the world energy arena, the GPCE 2012 will discuss the status quo of the region petroleum and petrochemical sector and the challenges that it faces. He added that the price of OPEC crude roles from around $90 at the end of 210 to around $121 pb at the end of April 2011. This is attributed to the interference of speculations in the market, amplified panic which in turn increased global concern over the possibility of escalation leading to a halt of supplies, given that the MENA region sits on more than 60 percent of the world's oil reserves and controls around 40 percent of the global oil trade. Oil prices turned lower in Asian trade Tuesday as concerns over dampening Chinese demand as well as global supply inventories weighed on the market, analysts said. New York's main contract, West Texas Intermediate (WTI) crude for delivery in May, shed 24 cents to $106.79 per barrel while Brent North Sea crude for May settlement was down 29 cents at $125.36 in the afternoon. Al-Naqi noted that despite this, oil prices dropped to $107.3 pb for the OPEC basket in the first nine months of 2011. This is in light of utilizing production surplus in some oil-producing countries, which made up for the volume leaving the market due to these events. The aim of this was to bring stability to the market, in addition to the uncertainty surrounding economic growth, especially in the US and Europe, which in turn reduces forecasts for global demand on oil. The Arab countries' dependency on oil as a main or primary source of national income has called for a mechanism of cooperation that supports "their economies and specializes in oil affairs" which led to the establishment of OAPEC in 1968. OAPEC now has 11 members (including Tunisia), the population of which accounts for 64 percent of the residents of the Arab states. The 11 members hold the majority of the resources of the Arab states, producing 27.3 percent of the overall world production of oil, 13.8 percent of the marketed gas, and sits on more than 56 percent of the world's confirmed oil reserves. Al-Naqi noted that, as such, OAPEC members form a regional economic bloc that is integrated and homogeneous. The bloc enjoys integrated economies, human resources and geographic factors that allow for their wealth of oil and gas to form a string joint base that, together, brings the states development and advancement. The main achievements of the organization, he said, is the establishment if a number of joint Arab projects that are linked to vital sectors of the oil industry. These joint projects allow for cooperation between the countries and gaining common benefit for the contributing parties, with emphasis on economic and commercial principles. OAPEC's role is to look for areas of cooperation, conduct a feasibility study, present the project to the member states, and bring together the relevant parties to hold a constituent assembly.
