US$80 is a 'good price'

SEVENTY-FIVE to 80 dollars (S$103 to S$110) a barrel is a satisfactory price for oil, the president of Opec said Monday, adding that the cartel may leave production unchanged at its meeting next month.

'Seventy-five to 80 dollars a barrel is a good price... for the recovery of the world economy,' Jose Maria Botelho de Vasconcelos, who is also Angola's oil minister, told reporters on the sidelines of a conference on Gulf energy security in Abu Dhabi.

Oil prices were trading within that range on international markets on Monday. De Vasconcelos said the cartel may leave production unchanged at its next scheduled discussion in Luanda on December 22, 'but there is a provision for an increase' in production.

'This situation will be discussed' at the December meeting, he added. He also told reporters on the sidelines of the conference that 'the market is oversupplied.' De Vasconcelos said the rate of compliance by Opec members with their production quotas 'is around 65 percent.' This rate is satisfactory, he added.

Opec expects oil demand to rise by 20 million barrels a day (bpd) to 106 million by 2030, he said, but warned of uncertainty in the market. 'There is too much uncertainty in the market over such matters as future world economic growth levels, consuming country policies and technology,' the Opec chief said in a speech to the conference.

'This makes it almost impossible to devise effective investment strategies for future production capacity, to meet forecast rising levels of demand. The latest projections in Opec's reference case see world oil demand rising by 20 million bpd to 106 million between 2008 and 2030. But these are only projections - the reality may turn out to be very different in an uncertain world.'