MercoPress. South Atlantic News Agency

Qatar says “it’s OK” with crude at 50USD per barrel

Qatar's oil minister said Monday he was “OK” with crude oil at 50 US dollars per barrel for this year, reflecting a measure of pragmatism by OPEC. However OPEC president forecasted that oil prices could reach 75USD by the end of the year.

Abdullah bin Hamad al-Attiyah's comments came as energy experts renewed warnings that the world faced the possibility of major oil price volatility if sufficient investments are not injected into developing the energy sector.

Separately, Kuwait announced that it had raised production capacity to 3 million barrels per day and was on target to hit its goal of 4 million barrels per day by 2020.

Al-Attiyah, whose country is one of the 12 members of the Organization of the Petroleum Exporting Countries, said he was “trying to be more pragmatic” about prices and that 50 USD is and “OK price for 2009” given the current economic climate. He spoke on the sidelines of the energy conference in Kuwait.

But OPEC president Jose Botelho de Vasconcelos, who is also Angolan oil minister, said he hoped the upcoming G20 meeting will help stimulate the world economy and contribute to growing demand for oil and higher oil prices.

”The trend in oil prices is positive. We hope that this trend continues until we reach 70 to 75 USD per barrel (this year),“ he told journalists. ”Compliance with production quotas, which is at around 79 to 80%, has contributed for the rise in oil prices“.

”There is in fact some expectations that the G20 meeting this week will come up with solutions that will stimulate the economy so that the price of oil could reach between 70 and 75 USD per barrel,“ he said

OPEC has been working to boost oil prices that have fallen by over 60% from mid July highs of 147 USD per barrel. The group refrained from announcing new production cuts during its March meeting in Vienna, opting instead to focus on greater compliance with an earlier 4.2 million barrel round of cuts from September levels.

That focus has helped OPEC at least establish a price floor, with the front-month light sweet crude oil contract for May delivery holding at around 50 USD per barrel -- about 10 dollars per barrel higher than prices last month.

Even so, several OPEC members, led by Saudi Arabia, have said pegged 75 USD per barrel as a price that is fair for consumers and allows producers to secure the investments needed to sustain current production capacity and bring new fields on line.

Experts have warned that without major new investment, the world could face new price spikes in crude oil.

But several OPEC members are facing major budget challenges stemming from the decline in oil prices, with the slide undercutting efforts to boost production capacity.

Saad al-Shuwaib, chief executive officer of the state-owned Kuwait Petroleum Corp., told reporters that Kuwait was ”revising“ its plans to develop its oil sector in light of lower oil revenues. But al-Shuwaib stressed that plans that ”will affect production capabilities in the future” will not be impacted.

He said the OPEC member's production capacity has reached 3 million barrels a day and its plans targeting 4 million barrels a day by 2020 were on track. He did not elaborate or provide a figure for Kuwait's current production level, saying only it was adhering to its OPEC quota.