OPEC's Badri doesn't see oil price falling below $100/b for 2011

Dubai (Platts)--1Nov2011/936 am EDT/1336 GMT

OPEC Secretary-General Abdalla el-Badri said Tuesday that he did not see oil prices falling below $100/barrel for the rest of 2011 but warned that oil price stability could not be achieved if all members opened their taps without a formal output agreement, Iran's Mehr news agency reported.

"Assessments made show that the oil price will not fall from $100 per barrel by the end of the current year," Badri told a news conference in Tehran.

Badri, who is in Iran attending an oil and gas conference, did not say what price reference he was using. Brent crude oil futures traded at $107.85/b at 1011 GMT, down $1.71/b, while New York light sweet oil futures were down $2.42/b at $90.77/b.

Badri also denied rifts within the 12-member group following OPEC's June meeting, when ministers failed to agree on a Saudi-led proposal to raise output, and he predicted the group would reach a consensus ahead of its December 14 meeting in Vienna.

"At the June meeting, there were differences between OPEC members. But this does not mean that the member countries have set up fronts against each other," Badri said.

He added that the situation had changed since June, when Libyan crude oil was off the market.

"With the return of Libyan oil to the global market it is possible to make new decisions," he said.

Badri said that OPEC's data in Jun pointed to the need to increase the OPEC ceiling in the second half of the year but that "some members disagreed."

The June meeting ended in disarray after ministers failed agree on a Saudi proposal to raise output to make up for the loss of Libyan crude oil and meet anticipated higher demand in the second half of the year. Iran was among the members opposed to the proposal.

Badri told Platts on October 12 that the 24.845 million b/d crude output target agreed in Oran, Algeria, in late 2008 was still valid and must be considered in any discussion of new production allocations at the oil producer group's December meeting.

Saudi Arabia and its Gulf Arab allies in OPEC consider that the absence of a formal accord rendered the Oran deal defunct and raised their production above the notional targets that had been in place since January 2009, prompting Iran to call repeatedly for restraint.

IRANIAN CALL FOR OUTPUT RESTRAINT

Iranian Oil Minister Rostam Ghasemi again called on members that had raised their output to scale back.

"It is necessary that those countries which had increased their oil production to make up for Libya's oil, decrease their production according to the OPEC quota system," Ghasemi said after a meeting with Badri.

Badri also said that the OPEC targets had not been fully adhered to in the last two years.

"In 2010 and 2011, OPEC's quota has not been respected completely. At the moment, OPEC members are producing 29.9 million b/d of oil on an average basis," he said, adding: "If all OPEC members open their oil taps, there will be no price stability in the global oil market."

OIL MARKETS BALANCED, PRICE SATISFACTORY

Badri said in remarks earlier on the sidelines of the conference that the oil market was balanced and oil prices were satisfactory.

"At the moment there is a balance between supply and demand and the oil exporting organization is satisfied with the current situation of global oil markets," Badri was quoted as saying by students' news agency Shana after meeting Ghasemi.

"There is enough oil...and there is no oversupply in the market," he added.

OPEC has not set a particular target for global oil prices and the current price is "satisfactory," Badri was quoted as saying.

Ghasemi, the current OPEC president, said that oil prices were fair and that he would seek to convince top OPEC members that the existing ceiling should be retained at the December meeting.

"Current oil price in the global market seems fair," he said on the sidelines of the conference.

"Iran heads this upcoming OPEC meeting and it tries to negotiate with the influential countries [within OPEC] to retain [the current] OPEC's oil production ceiling," Ghasemi was quoted as saying by the semi-official Iranian news agency Mehr.

Ghasemi denied a rift with Saudi Arabia over oil matters when asked to comment on the state of relations between the top two OPEC powers following revelations by the US of an alleged Iranian plot to assassinate the Saudi ambassador in Washington.

"Iran and Saudi Arabia do not have any oil differences," he replied when asked about the alleged plot.

"Iran and Saudi Arabia share two oil fields and there is no difference of opinion between our countries," he added.

--Staff, newsdesk@platts.com

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