OPEC satisfied with $50/bbl oil price, officials say

London (Platts)--18Nov2005

OPEC is "satisfied" with crude prices near $50/bbl because that level
more closely reflects supply and demand in the world market, an official for
Indonesia, the producer group's only member in Southeast Asia, said Friday.
 
     The comments follow similar remarks from other OPEC officials this week
playing down speculation that the group may cut supply to stem a drop in
prices. OPEC's oil benchmark was valued Thursday at $50.11, having the
previous day fallen below $50/bbl for the first time since June.

     "OPEC is satisfied with 50 dollars," said Maizar Rahman, Indonesia's
representative on OPEC's board of governors, by phone from Jakarta.
"Prices are moving closer to fundamentals."

     An official from another OPEC country said he was happy with current
price levels though added it was too early to say whether OPEC would need to
adjust output policy at a meeting next month.

     "$50/bbl is OK," the official said, declining to be identified by name.
"But we have to see what happens in the next few weeks."

     The OPEC crude price has fallen from a record high of $61.37 on Sep 1 as
a spell of warm weather in the US, Europe and Japan has eased concern of tight
winter fuel supplies. Prices peaked after Hurricane Katrina damaged oil
platforms and refineries in the Gulf of Mexico.

     OPEC has been producing crude close to capacity in 2005 to allow
consumers to build up stocks before the northern hemisphere winter, when
demand peaks. In September, OPEC offered to pump all the oil it could starting
Oct 1 to the end of the year, but has so far had no takers for extra barrels.

     Oil ministers from the 11-country group meet Dec 12 in Kuwait to discuss
supply policy. OPEC has no formal goal for prices, having ditched a price
target of $22-$28 in January.

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