Venezuela sees $200 oil if Suez canal closes

Oil prices could more than double to $200 per barrel if the Suez Canal closes because of the crisis in Egypt, though there is no sign of that happening at the moment, Venezuela’s oil minister said on Friday.

Oil Minister Rafael Ramirez, who is usually hawkish on prices, said OPEC would call an emergency meeting if the canal closed, but he saw no need for such an extraordinary gathering of member states right now despite Egypt’s turmoil.

“There is sufficient oil (in the market) and there have been no interruptions, but if they close Suez, that could take the oil price to $200,” Ramirez told reporters.

Egyptian unrest in the past days helped drive Brent crude above $100 for the first time since 2008. Prices slipped on Friday after an apparently unfounded TV report that President Hosni Mubarak could be stepping down.

Some traders said a correction was due as there was little sign of the turmoil affecting nearby oil producers or disrupting Suez Canal transport. [ID:nL3E7D4067]

Ramirez said he was comfortable with prices at current levels of close to $100 per barrel for Brent contracts and said Venezuela was committed to making OPEC members comply with the group’s quotas.

“In the current conditions there is absolutely no justification for an emergency meeting. The economy has not been affected by oil. If it has been hurt by anything it is more likely related to what is happening in the United States,” he said.

“We believe oil is reaching its fair level. We maintain that price is $100 per barrel,” Ramirez said at a news conference at the headquarters of state oil company PDVSA.

He said Venezuela was currently producing its OPEC quota of 3 million barrels per day, although the most recent official figures put output in November at 2.7 million bpd.

Intraday, in London, Brent crude futures fell below the $100 a barrel level as U.S. crude retreated below $90.

Members of the Organization of the Petroleum Exporting Countries will meet with consumers at a energy conference in Riyadh on Feb. 22 and are expected to talk informally about output levels. However, Ramirez said, production decisions could only be made at formal OPEC meetings.

Consumer countries would like to see OPEC raise the limits on oil pumped it imposed on members when prices fell in 2008