OPEC discounted last week’s $90 oil price and kept its output targets unchanged yesterday, betting supplies in storage and a fragile global economic recovery will prevent crude from surging.
Supply and demand are “in balance,” and $70 to $80 is “a good price” for oil, Saudi Arabian Oil Minister Ali al-Naimi said at the group’s meeting in Quito, Ecuador. OPEC forecasts demand growth will slow as the economy struggles to recover, amid ample supplies, according to a group statement.
“The issue they looked at was whether $90 is a blip or a trend,” said Bill Farren-Price, founder of consultant Petroleum Policy Intelligence, based in Winchester, U.K. “They’ve taken the view that there are one-off factors such as the cold snap, a weak dollar, that won’t be sustained in the new year.”
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