Opec boss warns world needs $65 oil to avoid price shocks
The head of Opec has warned that the world "badly" needs $65 oil to avoid any future price shocks.
Low crude prices have left firms with less cash to fund exploration, while producers pumping to the hilt has shrunk the global spare capacity margin. The has left markets increasingly vulnerable to production outages and soaring prices.
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"The oil market is recovering slowly but steadily. Luckily, the fundamentals show it is heading in the right direction," Mohammed bin Saleh al-Sada, the Qatari energy and industry minister, said in an interview with the Associated Press.
"I don't think we are yet at a fair price. We need to have a fairer price so that we can have the ability to invest more in order to secure the energy supply to the world and avoid any price shock."
Brent crude, the global benchmark, rose 1.4 per cent to $49.3 per barrel this morning. Meanwhile, West Texas Intermediate crude, the US benchmark made similar gains.
Al-Sada serves as president of Organisation of Petroleum Exporting Countries (Opec). He suggested non-Opec members could take part in the oil cartel's next meeting on 2 June in Vienna.
"We are in the consultation about it, whether it is appropriate to have it in the meeting, parallel to the meeting, or after the meeting, he said."
Read more: The oil market could now be in a phase of rebalancing
It will be the first meeting since Opec and non-Opec producers failed to agree a production freeze deal in April at Doha. The indecision, blamed on tension between regional rivals Saudi Arabia and Iran, led to accusations Opec was now irrelevant.
Norway's petroleum and energy minister, Tord Lien, said yesterday that the world shouldn't count on oil hitting $100 per barrel again. "It’s better to plan for $60 and let the people who want to hope for $100, hope for $100," he told Bloomberg TV.