KUWAIT CITY, Feb 10, (Agencies): Oil prices will continue to fall in the coming weeks, as demand declines and the outlook for the world economy remains gloomy, but this trend will not last for months, Kuwait’s new oil minister said on Tuesday.  Sheikh Ahmad Al-Abdullah Al-Sabah, asked by reporters whether oil prices would continue to fall, replied: “Of course, not (for) months. I say at least in the coming weeks.”  Global demand for oil would fall until optimistic economic signs emerged, said Sheikh Ahmad, who was appointed on Monday.  “Any growth in the economy will increase demand for oil,” he added in his first comments as oil minister.

He declined to say whether Kuwait would support a fresh output cut by the Organization of the Petroleum Exporting Countries if oil prices fell under $40 a barrel.  Kuwait supports team work by the exporters’ group but also has to take the health of the world economy into consideration, he said.
“We have to work hand in hand to make sure we are forging ahead in the right direction, which will help the international economy to revive and grow,” he said.  On Monday, Algeria’s energy minister Chakib Khelil said Opec would be under less pressure to cut oil production at its next meeting in mid-March if the US crude oil price stabilised near current levels around $40 a barrel.

US light crude for March delivery was at $41.44 a barrel at 1434 GMT on Tuesday, down from a record high of $147.27 reached in July last year, as the global recession has eroded demand for fuel.
Opec has agreed to cut production by 4.2 million barrels per day (bpd), about 5 percent of daily world demand, since September to prop up prices.
The group next meets to set supply policy on March 15 in Vienna.
Meanwhile, Kuwaiti export crude gained 15 cents on Monday and came to $42.07 per barrel (pb), after having been at $42.22 on Friday, said Kuwait Petroleum Corporation (KPC) on Tuesday.
The international oil market is closed on Saturday and Sunday, hence the lack of numbers for these two days.
This rise comes after a series of small drops in January.
Several political and economic factors contributed to the rise in international oil prices over the past few weeks, the most prominent of which was the Israeli assault on Gaza Strip, the drop in the exchange rate of the US dollar, reports of an increase in Chinese reserves, as well as the suspension of Russian gas exports to the EU through the Ukraine.
Opec members, during a meeting in Algeria, had decided to cut production by 2.2 million barrels per day to prevent further deterioration of prices.
Kuwaiti crude had reached an all-time-high of $135 in July 2008, before beginning its downward spiral.
Iran said on Tuesday oil producers agreed that $70 to $90 a barrel was the right range for crude and more action was needed to push oil prices in that direction, Iran’s ISNA news agency reported.
Oil prices have tumbled from a peak of $147 a barrel last year to around $40 now, despite a series of output curbs by the Organisation of the Petroleum Exporting Countries (OPEC), which meets again in March.
Declining demand worldwide has prompted OPEC to reduce output by 4.2 million barrels per day (bpd) since September. Iran has said a further cut would be needed.
Algeria’s energy minister, Chakib Khelil, said on Monday that OPEC would be under less pressure to cut in mid-March if US crude stabilised around $40.
But Mohammad Ali Khatibi, OPEC governor for Iran, the world’s fourth largest crude exporter, said $70 to $90 a barrel was the “price agreed upon” by producers, ISNA reported.
“In view of the existing economic conditions, the oil market is not ready for changing prices to go in this direction (towards the $70-90 range) and more work should be done so that the price goes towards a better level,” he said.

“If oversupply did not exist, consuming countries would not be increasing their stocks,” he added.
Meanwhile, oil rose $2 towards $42 a barrel on Tuesday, lifted by expectations that the approval of an $800 billion-plus stimulus package by the US government would boost demand for oil in the world’s largest energy consumer. US light crude for March delivery rose $2.00 to $41.56 a barrel by 1422 GMT. The contract settled down 61 cents at $39.56 a barrel on Monday.  London Brent crude gained $2.10 to $48.12 a barrel, maintaining its premium against US prices.  “I think the market is expecting the US stimulus package to go through, which should be bullish for oil prices but it’s anyone’s guess at the moment,” said Tony Machacek, a broker at Bache Commodities.

US Treasury Secretary Timothy Geithner was also due to unveil a plan to rescue stricken banks at 11 a.m. (1600 GMT), and the stimulus bill was expected to be passed by the Senate but could still face days of wrangling before its final approval.  Investors worried about whether the separate bank bailout plan would be enough to stem the global financial crisis.  Dallas Federal Reserve President Bank Richard Fisher said on Monday that he did not expect the US economy to grow in 2009 and much hinged on the impact of the package.  The global financial crisis has also slashed world fuel demand and dragged oil prices from a record high of above $147 a barrel in July.

 On Monday, OPEC Secretary-General Abdullah al-Badri reiterated the group’s willingness to cut oil production further to steady prices at the group’s next supply policy meeting on March 15 in Vienna.
But Algerian energy minister Chakib Khelil said the group would be under less pressure to cut output if oil stabilised near the $40 a barrel level.  Al-Badri said the 12-member group appeared to be implementing production cuts more thoroughly than expected by some, with 80 percent compliance.  A weekly national petroleum report from the US American Petroleum Institute as well as the US Energy Information Administration’s monthly short-term energy outlook to be released later on Tuesday will give further direction to prices, analysts said.