OPEC chief ‘comfortable’ with current oil price

OPEC secretary general Abdullah al-Badri has said that he was comfortable with oil prices at their current level and he did not expect production levels to change between now and October.

 

 

“Current prices are comfortable at this time,” al-Badri told reporters in his Brussels hotel ahead of a meeting on Monday with EU Energy Commissioner Guenther Oettinger.

The two men are likely to discuss economic growth prospects, which Badri described as fragile in the West.

Related: OPEC cuts oil demand forecast, ups non-OPEC supply
Oil’s more than $20 plunge over three weeks last month, sparked by European debt problems, underscored market volatility from equities to commodities and the fragile state of global economic recovery.

“Right now we are seeing strong growth in one part of the world and a sluggish response from advanced countries,” Badri said.

Nevertheless, oil markets are oversupplied, he said, calling on OPEC members to show more discipline in keeping to their production targets, having slipped from 80 percent compliance at one point to around 53 percent today.

“When you look at the inventory overhang and floating storage, about 244 million barrels, that means there is a lot of oil in the market — oversupply,” he said. “We need more discipline.”

But he saw no need to call another OPEC meeting before the one currently planned for October and no change in production levels between now and then.

BP’s accident in the Gulf of Mexico threatens to add to the long-term hurdles facing deepwater oil exploration, but al-Badri said it should be kept in perspective and the US six month ban should not be extended. A US federal judge on Tuesday struck down the moratorium imposed by President Barack Obama’s administration, which has appealed against the decision.

“In the long-term maybe we’ll see a lot more discipline, more regulation, difficulties to go for deeper drilling – and deeper drilling is another frontier we should really go for with a lot of potential,” he said.

“I see President Obama in limbo,” he added. “He’s not certain there is the regulation to prevent another accident, so he took that decision. I hope after the six months, he’ll revisit his decision and let things go back to normal.”

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