By Devika Krishna Kumar
CALGARY (Reuters) - OPEC President Suhail al-Mazrouei said on Wednesday that volatility in the crude market was undesirable and OPEC prefers a flatter price environment.
The Organization of the Petroleum Exporting Countries and other large producers are working on a long-term plan that would improve backup in cases of geopolitical supply disruption.
"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 sidelines of a Canada-United Arab Emirates Business Council event in Calgary.
But the current geopolitical environment drives price volatility, he added, pointing to recent port shut-ins in Libya.
Tripoli-based Libya National Oil Corp said on Wednesday four export terminals were being reopened after eastern factions handed over the ports, ending 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.
Opening Libya's ports triggered a sell-off in global oil markets on Wednesday, with global benchmark Brent futures plunging 6.92 percent, the sharpest one-day drop in two years. [O/R]
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.
(Reporting By Devika Krishna Kumar, writing by Jessica Resnick-Ault, Editing by Rosalba O'Brien and James Dalgleish)