OPEC al-Badri says oil prices need to rise for investment

Oil prices need to rise above the current $77 a barrel price to encourage more investment by OPEC member countries, the group’s Secretary General Abdullah al-Badri said on Friday.

Abdullah al-Badri said the average crude price was around $57 this year and needed to rise to around $65-70 for investments to be profitable in oil producing countries. OPEC members have postponed around 35 oil investment projects since prices tumbled from their peak of around $150 a barrel last year, he said

“With a $57 (average) price, we cannot invest in new oil,” Badri told reporters. “To reach $77 as an average, we need a high price of more than $80.” Badri said the rise in oil prices were not due to any supply problems, but could be attributed to a rise in equity markets and some speculation.

“We don’t prefer to see a very high price. We don’t prefer to see a low price,” he said. “We look to see a price where producers and consumers can live together.” The OPEC Secretary-General, who met with top Nigerian oil and industry officials earlier this week, also estimated compliance rate of around 65 percent for the OPEC’s output target levels. “It is slipping down to 65 pct now. It is not really bad,” he said.

Tags:  oil prices, OPEC