(MENAFN- Arab Times) KUWAIT CITY Sept 21 (KUNA): A Kuwaiti oil expert indicated Sunday that the prices of oil will not return to its previous levels as the fair price is to range between $90 and 95 per barrel adding that oil prices for current year are to close at these levels. Oil prices inability to reach its previous levels will be due to supply increasing more than demand if urgent political or natural crisis did not occur Khalid Boodai President of Horizon Management Consulting stated to KUNA. He attributed the supply increase to the output rise of oil producing countries that were and still unable to reach a full-production capacity such as Iraq and Libya and to increase of US and Canada production of shale oil. Moreover the demand from China slipped due to industrial production contraction he said. The decline in oil prices during the past period is due to several reasons including relative decline in China's industrial production increase of oil flows in Iraq and Libya and the US currency rate exchange rise which is inversely related with oil prices said Boodai. Factor He also said that psychological factor related to shale oil production has a significant impact on current prices in oil markets including expectations on shale oil occupying a major place at markets in the future due to its production increase in the US and Canada as well as indications on 50 percent costs decrease of oil shale production originally ranged between $70 to 75 per barrel in three or five years to be $40 per barrel only. However shale oil production despite its direct impact will not be significant at current time Boodai said noting at the same time that it is still affecting prices because it decreases the US demand leaving imported oil amounts to the US markets to await buyers in addition to long-term oil purchase contracts that oil markets traders take into account. The Organization of the Petroleum Exporting Countries (OPEC) will not stand still toward oil prices decline as it has an attempt to decrease oil production of its member-countries he noted adding that OPEC does not take such a step unless prices drop below $90 per barrel. Currently the fair price is ranged between $90 and 95 per barrel in accordance with inflation volume Boodai indicated adding that OPEC countries would take decisive steps if prices drop below $90 per barrel which would threaten their economies and cause them financial losses if inflation volume topped oil prices. Meanwhile oil prices will not decline or collapse significantly as it will remain at $90 per barrel until end of 2014 Boodai expected adding that the prices would range between $85 to 95 during 2015.
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