Opec is happy with an oil price of between $70 and $80 a barrel and wants to avoid a double-dip recession, its secretary general said on Tuesday, a month before the group meets to set supply policy. While Opec's compliance with agreed output limits is not good and inventories are high, prices are not suffering as a result, Secretary General Abdullah al-Badri said at a news conference to mark Opec's 50th anniversary.
"We don't want to rock the boat, just leave things as they are for the time being," he said. "We don't want to see a double-dip recession." Badri declined to comment on what the Organisation of the Petroleum Exporting Countries, source of more than a third of the world's oil, would decide when it meets on October 14 to reconsider output policy.
Analysts say the group is unlikely to formally change policy in October given the fragile global economy and the resilience of oil prices in spite of huge amounts of inventories. "I cannot really tell you about production changes," Badri said. "As we see it at this time, yes there's an inventory problem, we are not really having a good percentage of compliance, we have 53 percent, but it does not really affect the prices." Opec has left its output ceiling unchanged for almost two years since announcing a record supply curb of 4.2 million barrels per day in December 2008 to combat lower demand and prices. A Reuters survey found Opec completed 53 percent of that reduction in August. Badri said Opec remained content for now with an oil price of around $70 to $80 a barrel, a range in which it has largely traded for the past year.
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