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