OPEC 'comfortable' with oil price: cartel head
OPEC is "comfortable" with the current oil price, but would like it to be higher, the oil cartel's chief Abdalla Salem El-Badri said here Wednesday,
"Prices at this time are comfortable. But they are not at the level we are shooting for," the secretary-general of the Organization of Petroleum Exporting Countries told a news conference here.
Current oil prices of around 60 dollars "don't encourage investment," El-Badri said when asked whether the cartel would change its production targets if the difficult economic environment prevailed until the end of the year.
He was speaking at a news conference held to mark the publication of OPEC's annual World Oil Outlook, in which the cartel said it had revised downwards its medium and long-term forecasts for global oil demand in the economic crisis.
Oil prices have slumped owing to the severe economic downturn after striking historic peaks of more than 147 dollars a barrel a year ago. On Wednesday they plunged under 62 dollars to hit the lowest levels since May.
The report painted a bearish picture for the oil markets, with OPEC predicting that global oil demand would be "less than 106 million barrels per day (bpd) in 2030," much lower than a previous forecast of 113 million bpd.
Oil producers were "concerned like everyone else," El-Badri told the news conference.
"We have this recession and the financial crisis going on. This is affecting demand," he said, but added: "I hope this will bottom out in 2009 and then demand will pick up afterwards."
By 2012, he added: "this problem will be over and we'll go back to normal business."
In its report, OPEC said that recession-hit developed nations among the OECD (Organisation for Economic Coooperation and Development) countries, are unlikely to return to their full economic growth potential until 2015.
Oil demand in those countries was therefore likely to continue to contract until 2010 and then stagnate until 2013.
By contrast, oil demand in developing countries is set to expand over the long-term, with a projected increase of 23 million bpd between 2008 and 2030.
"Almost 80 percent of the net growth in oil demand from 2008-2030 is in developing Asia," the report said.
Nevertheless, on a per capita basis, oil use per person in North America "will still be more than 10 times that of South Asia," OPEC noted.
The transportation sector would remain the main source of future oil demand growth, accounting for over 60 percent of the total increase to 2030, the report continued.
That was lower, however, than in its previous assessment owing to the current global economic slowdown "as well as the assumed greater efficiency improvements."
OPEC said that car ownership per capita in developing countries was set to rise from just 31 cars per 1,000 people in 2007 to 87 per 1,000 by 2030.
"This remains well below OECD levels, however, which average 530 per 1,000 by 2030," it said.
OPEC member countries were currently investing heavily to expand upstream capacity. But even if the low level of oil prices meant that some of the projects had to be delayed or even postponed beyond 2013, "spare OPEC crude oil capacity is nevertheless set to remain at comfortable levels," the report said.