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Business

OPEC chief says oil price is 'comfortable'

Text by By France 24

Latest update : 2013-04-04

The head of OPEC said Thursday that current oil prices are 'comfortable' for both producers and consumers, claiming that the current price is high enough for producers to invest but not too high to hinder the world economy.

OPEC is not seeking to raise oil prices, with the cartel's chief estimating Thursday that the current level is "comfortable" for both producers and consumers.

"We are not advocating a higher price, we are advocating a reasonable price where we can invest (...) and producers and consumers can live together," OPEC Secretary-General Abdullah al-Badri said at an oil industry gathering in Paris.

“Producers are able to get decent income for their people, also they can invest,” al-Badri separately told FRANCE 24. He pointed to a current price for Brent crude of around $110 a barrel.

“Consumers are happy with the price,” he also told FRANCE 24, adding, “it’s not really that high to hinder the world economy. This is the most important thing; prices should not hinder the world economy.”

The oil market's two main contracts, Brent North Sea crude for delivery in May was trading at $107.36 a barrel in late morning deals in London, while New York's West Texas Intermediate (WTI) light sweet crude for May was at $94.39 a barrel.

The 12-nation Organization of Petroleum Exporting Countries accounts for 35 percent of global supply.

But al-Badri played down concerns of divisions within OPEC to FRANCE 24, acknowledging that while they have existed in the past they are not currently an issue.

Al-Badri's comments echo those of Saudi Arabia, OPEC's top producer with Oil Minister Ali al-Naimi telling reporters last month that Saudi Arabia sees $100 a barrel as a "reasonable" price for oil.

OPEC’s al-Badri also told FRANCE 24 that he doesn’t expect oil demand to drop as natural gas production ramps up.

The rapid expansion of shale gas production in the US – aided by the technology of hydraulic fracturing, or “fracking” – has put significant quantities of extra gas on to world markets.

(FRANCE 24 with wires)

Date created : 2013-04-04

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