Opec never directly discussed target price for oil

19 May 2010

Qatar’s energy minister says member states discuss range of prices

Opec member states have never directly discussed a target price for crude oil, according to the cartel’s longest-serving minister.

Speaking at an Opec conference in Doha on 16 May Abdullah bin-Hamad al-Attiyah said that although Opec members had discussed a range of prices which they saw as beneficial to both producers and consumers they had never held talks over the “right “ price for oil.

“Opec never discussed this matter of what is the right price,” he said. “We can say what is a reasonable price; we can discuss a centre-point of how we can live; but a reasonable price is just an assumption.”

In 2008, the cartel’s member states set a target to cut 4.2 million barrels a day (b/d) from its members’ output between September 2008 and the end of February 2009, to a total of 24.85 million b/d to curb falling oil prices.

Since prices bottomed out below $35 a barrel in the first quarter of 2009 they have hit peaks above $85 a barrel as demand increased following the global financial crisis of 2008-2009. However, fears over the US economy and the stability of Eurozone members has recently seen prices fall back, with the US’ benchmark West Texas Intermediate contract trading at $70 a barrel, sparking rumours that Opec would cut production again to push values back up.

 Al-Attiyah says that the price described as “right” by Saudi Arabia’s ruler King Abdullah of $75 was comfortable for both producers and consumers.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications