Current Oil Prices Unlikely To Harm World Economy, Claims OPEC Chief
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The Organization of the Petroleum Exporting Countries (OPEC) will not seek to raise oil prices any higher, said its secretary general Abdallah el-Badri on Thursday, claiming that the current value of $107/barrel was at a “comfortable” level for both producers and consumers; and was unlikely to cause “harm” to the global economy.
El-Badri, who was speaking at an oil industry gathering in Paris, told the conference that the 12-nation bloc was satisfied with current oil prices, asserting that “we don’t advocate any extremes, too low or too high.”
The Organization of the Petroleum Exporting Countries (OPEC) will not seek to raise oil prices any higher, said its secretary general Abdallah el-Badri on Thursday, claiming that the current value of $107/barrel was at a “comfortable” level for both producers and consumers; and was unlikely to cause “harm” to the global economy.
El-Badri, who was speaking at an oil industry gathering in Paris, told the conference that the 12-nation bloc was satisfied with current oil prices, asserting that “we don’t advocate any extremes, too low or too high.”
“We are not advocating a higher price, we are advocating a reasonable price where we can invest (…) and producers and consumers can live together,” he said, as cited by AFP.
[quote]”We believe current price levels are supportive of the energy future we portray, and will not harm the global economy…the oil price as we see it now is comfortable for producers and consumers,” he added.[/quote]Related: A Major Oil-Led Recession In 2013?: Gail Tverberg
Related: 10 Reasons Why High Oil Prices Are A Problem: Gail Tverberg
The average price of oil this year on global markets has been $110 per barrel, according to Reuters. Last month, Saudi Arabia’s Oil Minister Ali al-Naimi told reporters that $100 a barrel was a “reasonable” price for oil.
El-Badri on Thursday argued that any future drop in oil prices would endanger energy investments, highlighting the rising cost associated with projects in the shale industry.
[quote]”If low prices lead to energy investment across the world being buttonholed or cancelled altogether, that would sow the seeds of higher oil prices in the future,” he said.[/quote]“We have already seen a slowdown in US shale gas drilling as natural gas prices fall,” he added.
Related: Why Even The Shale Boom May Not Prevent $200 Oil – Interview With Chris Martenson
Related: Why Shale Will Not Solve Peak Oil: Dave Summers Interview
Meanwhile, El-Badri also admitted that demand for oil from OPEC could fall in 2013 as a result of economic weakness in the European Union and reduced demand from the U.S..
The OPEC secretary general predicted that oil demand would fall by between 200,000 and 300,000 barrels a day to 29.7 million barrels a day.
Overall global demand for oil (from all countries) though should rise by about 800,000 barrels a day led by economic growth in the likes of China and India, he said, as cited by the Wall Street Journal.
