Saudi still favours $70-$80 per bar­rel oil, OPEC holds sup­ply

The Pak Banker - - International3 -

QUITO: Lead­ing OPEC pro­ducer Saudi Ara­bia said on it still fa­vored a $70-$80 price range for oil, a re­state­ment of a two-year-old pol­icy that will be wel­comed by con­sumer na­tions wor­ried that ris­ing oil prices may get out of con­trol and ham­per global eco­nomic re­cov­ery.

Saudi Oil Min­is­ter Ali alNaimi told re­porters at an OPEC meet­ing in Quito: "$70$80 is a good price." The com­ments came as the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries agreed, as ex­pected, to keep pro­duc­tion re­straints un­changed, de­spite a re­cent surge in crude prices to $90 a bar­rel. With OPEC's next meet­ing not sched­uled un­til June 2, mar­kets are likely to test Saudi Ara­bia's re­solve to keep prices be­low $80.

"The real is­sue here is whether ad­di­tional sup­plies will be added," said Lawrence Ea­gles, global head of oil re­search at JP Mor­gan in New York. "Min­is­ter Naimi said $80 was the top end of the range; let's see if he fol­lows up with higher sup­plies."

U.S. crude closed at $87.79 a bar­rel on Fri­day hav­ing touched a two-year high of $90.76 ear­lier in the week.

Saudi, OPEC's most in­flu­en­tial pro­ducer, is likely to face op­po­si­tion to any change in pol­icy from other mem­bers who ar­gue that de­mand is not strong enough to war­rant more oil and that spec­u­la­tors are to blame for driv­ing prices up.

Price hawk Venezuela called for $100 oil and said OPEC should not lift out­put again through the end of 2011.

"We be­lieve that the mar­ket should com­pen­sate high pro­duc­tion costs. $100 ap­pears to be an ad­e­quate price," said Venezue­lan Oil Min­is­ter Rafael Ramirez. -Reuters

SEOUL: US Pres­i­dent Barack Obama meets with China's Pres­i­dent Hu Jin­tao as part of the G20 Sum­mit in Seoul. -Reuters

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