OPEC has set unofficial target price of 70 usd per barrel for oil - IEA |
|
|
|
Published
:
Tue, 28 Aug 2007 16:36
|
PARIS (Thomson Financial) - OPEC has set an unofficial target oil price of around 70 usd per barrel, which could weigh on growth, said Claude Mandil, director general of the International Energy Agency, in an interview with the Arab Oil & Gas monthly.'The market has become aware' that OPEC 'has set an implicit new objective of keeping prices at or around 70 usd per barrel and that the organisation is trying to defend this level,' said Mandil.Mandil said he 'deplores' the action, which he says 'is a factor which could, as we have often said, weigh on global economic growth and constitute a very heavy burden on the poorest populations'.The IEA director also said oil stocks will have to rise, as oil consumption has grown at 2 pct per year and 'continues to rise'.According to Mandil, OPEC is right to say the market is currently well supplied, but added that 'what interests us most is the market of tomorrow, in other words, at the end of 2007'.'It is from now that the refineries must start working harder to satisfy winter demand,' he said. 'We therefore need more crude oil but, unfortunately, signs from OPEC do not give us much hope of this.'The next OPEC meeting is scheduled for Sept 11 in Vienna. For Mandil, the announcement of a production hike from the cartel 'is currently not the most probable hypothesis'.'In addition, I have not had any indication of the possibility of discrete increases (in output) on the part of particular producers,' he added.Mandil also said he believes the cartel must step up its level of investment from now. 'New investments that have just been decided, or are on the point of being decided, will not bear fruit until after 2012,' he said.Questioned on the consequences of the sub-prime mortgage crisis emanating from the US, Mandil said the impact of the crisis on oil demand was currently 'only a hypothesis'.If producing countries are genuinely concerned about the impact of the crisis on global economic growth, 'the right solution would be to try to cut oil prices to compensate for its possible deflationary effect on the economy', he said.The price of WTI crude oil traded in New York reached a historic peak of 78.77 usd on Aug 1 due to a fall in US crude stocks. Brent crude is currently trading down 65 cents at 70.30 usd per barrel, and WTI crude down 59 cents at 71.37 usd per barrel.jan.harvey@thomson.comhar/lamCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
|
|
|
|
Print this Story
Indonesia minister says no indications yet whether OPEC will raise oil output 