The head of the Organisation of Petroleum Exporting Countries (OPEC) described oil prices Wednesday as “satisfactory” and supply as adequate, while predicting Libyan output will return to pre-conflict levels by mid-2012.
OPEC Secretary General Abdullah El-Badri also urged the European Union to avoid a ban on Iran’s “difficult to replace” oil exports.
“Average oil price this year is satisfactory for producers and consumers,” Badri told participants at the World Petroleum Congress in Doha, dodging repeated requests to name a figure that he would describe as fair.
“At OPEC, we don’t have a target” price, he said, pointing to huge investments needed to meet surging demand in the longer term require “decent prices.”
“We are investing a lot of money but we need decent prices,” he said, urging countries investing in renewable energy to ensure their policies do “not discriminate against oil.”
Venezuelan President Hugo Chavez said on Tuesday that a price between $100 and $120 per barrel was “fair.”
The new executive director of the International Energy Agency, Maria Van der Hoeven, who shared the podium with Badri, expressed consuming countries’ concern over high prices.
A triple-digit price per barrel remains a “source of concern,” she said.
New York’s main contract, light sweet crude for delivery in January, gained 15 cents to $101.43 a barrel in afternoon trading in Asia over eurozone concerns.
Brent North Sea crude for January delivery rose three cents to $110.84.
Badri said that uncertainties over global economic growth, Japan’s multiple disasters and unrest in North Africa and the Middle East have put the oil market this year “in constant flux.”
But he insisted that there was “no shortage of oil,” lamenting that prices have also been affected by “excessive speculation” which he described as “detrimental to both consumers and producers.”
Members of OPEC are meeting on December 14 in Vienna, but many member states have indicated that there will be no changes to production, despite a quicker-than-expected resumption of Libyan oil output.
Badri said the war-wrecked North African nation will return to its pre-war production level “at the end of the second quarter” next year, although Tripoli has said it expects to reach its pre-conflict output level by the end of 2012.
“The production is coming very fast and has surprised almost everybody,” said Badri.
“By the end of the second quarter of next year Libya will produce 1.58 (million barrels per day),” he said.
Last month, Libya’s National Oil Corporation said the country boosted its crude production to 600,000 barrels per day and is expected to add another 200,000 bpd before the end of the year.
Although OPEC failed to officially raise its production in June to compensate for Libyan exports, oil producers were said to be unilaterally pumping more than their quotas.
Meanwhile, OPEC’s head urged the EU not to impose sanctions on oil exports from cartel member Iran, arguing that Tehran’s exports to Europe were “very difficult to replace.”
“I really hope there will not be an EU embargo on Iranian oil,” he said.
“Europe now is facing some difficulties… so to cut these 865,000 barrels a day immediately, I think it will be a problem,” he said, apparently referring to Iran’s exports to all of Europe, as the EU imports only around 450,000 bpd from Iran, according to the International Energy Agency.
The head of French oil giant Total, Christophe de Margerie played down the impact of the potential EU sanctions.
“I dont think that it will have a major impact on Iran,” he said in Doha, pointing out that the “market always finds a solution.”
But he said it could pose a limited problem for importers who will need to adapt to other qualities of oil.
The EU last week piled up pressure on Tehran following an attack on the British embassy, beefing up sanctions over Iran’s nuclear programme, while it threatened to hit its oil and finance sectors next.
EU foreign ministers meeting in Brussels slapped sanctions on an extra 143 firms and 37 individuals, after the publication last month of a report on Iran’s nuclear sector by the International Atomic Energy Agency (IAEA).
The ministers threatened in a statement to “extend the scope” of punitive action to strike at Tehran’s economic heart.
It said the EU would examine measures targeting the financial system, energy and transport by late January.