OPEC would be pleased to see oil prices remain at around $60 to $65 a barrel, the group's secretary general said on Thursday, as he rebuffed consumer nation concerns about summer crude supplies.
Abdullah al-Badri, in Bali for a meeting with top officials from the International Energy Agency (IEA), also told Reuters that OPEC would be unlikely to consider further output cuts unless prices fell below $50 a barrel for over a month.
The comments may disappoint consumer nations who would like the cartel to pump more crude ahead of the summer, but will also provide some hope that the group might not rush to make a third production cut should prices fall back sharply.
Asked if an oil price of $60-65 was fine, Badri said: "I think I would agree with that. I don't want to see a low price and I don't want to see a high price."
OPEC's crude oil price basket dipped below $50 a barrel briefly in January but has remained resolutely above $60 since late March, and few analysts expect a significant retreat with gasoline stocks low and the summer season nigh.
Badri declined to say at what price level OPEC would increase output, but did give a rare indication of the floor price that could cause the cartel to tighten its taps.
"If prices were at $50 or below for a long period, that would trigger thinking by the ministers to do something," he said, when asked what kind of a price level would provoke a further cut in production.
Asked how long, he said "more than a month". Badri did not say which type of crude he was referring to.
The OPEC basket price was around $55 a barrel when OPEC agreed on its first output cut in late October, and at nearer $58 when it decided on a second reduction in mid-December.
A month later, prices had slumped below $50 before quickly rebounding due to the curbs, disruptions to Nigerian output and low U.S. gasoline stockpiles, leading to calls for more crude.
Badri reiterated that OPEC believed there was plenty of crude in the market, rebuffing persistent calls from the IEA -- energy adviser to 26 industrialized nations -- to pump more oil.
London Brent crude currently seen as more representative of the global oil market, rose 28 cents to $68.25 a barrel for new front-month July delivery on Thursday. U.S. crude futures rose 16 cents to $62.71.
Badri also reiterated OPEC's concern that future demand for its crude was being undermined by consumer-nation policies that are driving conservation and alternative fuel use.
"We are not really worried about other sources of energy, our worry is government policies. Countries try to impose taxes to subsidize other sources of energy," he said.
Earlier this month top exporter Saudi Arabia signaled it might not have to boost potential output above its targeted 12.5 million barrels per day (bpd) capacity if consumers succeed in reducing their reliance on oil.
"We have to have investment, but we need the security of demand. If you have additional capacity you have to maintain it, and that has a cost," Badri said.
(Reuters, 17/05/2007)