U.S. News

OPEC Hopes to Keep Oil at $50 to $60


The Organization of the Petroleum Exporting Countries aims to keep oil prices at a "reasonable" $50-$60 a barrel, a level that supports upstream investment and economic growth, the head of its research arm said on Thursday.

Hasan Qabazard also reiterated that OPEC did not want to see prices roar back to the $78.40 a barrel record high touched last July, which threatened to choke off growth.

"We would hope to maintain prices as they are today, which are not only conducive to (our) investment but also to developing alternatives that will complement our efforts to meet the world's future energy needs," he told reporters.

"Prices today we believe are reasonable. We hope these prices will stay in the level where they are, between $50-$60 a barrel. We believe they will stay in this range for the coming few years," he said in the Thai capital, Bangkok, where he is accompanying OPEC President Mohammed bin Dhaen al-Hamli at an energy forum.

Many oil ministers and analysts have suggested that such a price range would be sufficient to justify the tens of billions of dollars of investment that OPEC nations are making to lift capacity, without risking world economic growth.

But the group itself, which controls over a third of world output, has shied away from setting itself any formal price targets or reference bands, preferring to focus on inventory levels when making decisions about production policy.

Qabazard heads the producer group's research division, which gives OPEC ministers its supply and demand forecasts but does not usually take an active role in setting output policy.

"I believe the price will be stable because there is a lot of investment that has been taken, both upstream and downstream. These investments are coming online, almost $100 billion for more than 100 projects on the upstream alone," he said.

He also said current prices had not harmed economic growth and that the group did not want to see crude soar to record highs again.

"If (prices) stayed that high, they would deter economic growth, we don't want to see that. We want to see robust economic growth," Qabazard said.

Earlier in the day, OPEC chief al-Hamli, also oil minister of the United Arab Emirates, said the group did not have any "trigger price" that would prompt it to convene an emergency meeting before September.

OPEC agreed last week to keep its 1.7 million barrels per day (bpd) in output curbs in place for the time being.