RTRS: OPEC says $100 won't necessarily trigger more oil
By Amena Bakr and Daniel Wallis
QUITO (Reuters) - OPEC on Thursday said it wanted an improvement in oil market fundamentals before increasing crude supplies, even if prices go to $100 a barrel.
"If it goes to $100 due to speculation, OPEC will not move," OPEC Secretary General Abdullah al-Badri told reporters in Quito, Ecuador ahead of a meeting of oil ministers on Saturday. "OPEC will not act unless something is wrong with the fundamentals."
Those comments may worry consumer nations that want the Organization of the Petroleum Exporting Countries to keep a lid on crude prices to prevent inflated fuel costs hindering economic recovery.
Inventories remain too high for OPEC's liking at nearly 60 days of demand in the industrialized nations of the OECD, some 6 days above levels ministers often cite as comfortable.
That has not stopped oil prices rising. U.S. crude broke above $90 a barrel earlier this week for the first time in two years as traders bet that a recovery in economic growth led by emerging economies would spur increased fuel demand. Crude settled at $88.37 on Thursday.
"OPEC is focused on inventory levels rather than a specific price point," said David Greely, head of energy research at Goldman Sachs in New York.
"When inventories fall back to more normal levels, then that's when they'll bring the oil back - it's not a question of the price being at $90, $100 or even $110 for the group. Inventories are key."
The 12-member OPEC is widely expected to leave supply targets unchanged on Saturday.
"At this time we don't want to disturb the market," said Badri. "The market is in a real comfortable position."
For two years OPEC aimed to keep oil in a $70-$80 range that it said was fair for both producer and consumer nations and supportive for world economic growth.
But as prices rose it appeared to change its mind in early November when Saudi Oil Minister Ali al-Naimi, the group's most influential voice, said that consumers could cope with a $70-$90 range.
That has left oil markets wondering exactly what conditions OPEC might require to open the taps.
"I find it a little curious that he would say that," said Jan Stuart, oil analyst at Macquarie, referring to Secretary General Badri's comments.
"I think that what Saudi Arabia or Al-Naimi flagged was that the comfort range runs from $75 to $90. Previously they were talking about $85, so I don't know how $100 doesn't matter."
OPEC President Wilson Pastor of Ecuador said the issue of a favored price range would be discussed on Saturday.
Libya, one of OPEC's price hawks, thinks $100 crude is not far off.
"The price may reach $100 by the beginning of the (new) year," said Shokri Ghanem, the head of Libya's OPEC delegation.
OPEC slashed oil supplies two years ago when global recession hit fuel demand and sent oil prices down from a record $147 to a low of just over $33 a barrel.
It has not changed supply policy since. While it is no longer strictly in compliance with formal supply targets, it is still pumping 2.3 million barrels a day less than two years ago, at about 29 million bpd.
