Oil prices not limiting economic recovery – al-Badri

Oil prices are at a satisfactory level for producers and consumers, allowing oil producers to invest in capacity while not impeding the global economic recovery, Opec secretary-general Abdullah al-Badri said today.

There is no shortage of oil on the market, with Opec members having been able to offset the loss of Libyan crude earlier this year, al-Badri said at the World Petroleum Congress in Doha.

But he again hit out at the impact of market speculation. As much as 3bn b/d of crude is traded on paper markets, around 35 times the level of global oil demand, he said. Excessive speculation can at times cause prices to detach from fundamentals, and there is a need for a better understanding of the relationship between market stability and speculative activity, he said.

Opec has no target price, al-Badri said. But he warned the market is facing “uncertainties” such as the outcome of the EU debt crisis, the slowing of the US economy and efforts to stop economies in China and India from overheating. These come on top of the earthquake and tsunami in Japan earlier this year and geopolitical uncertainty in the Middle East, which he said have kept the market in a constant state of flux.

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