Saudi king says oil should be $75 per barrel

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(Agencies)
Updated: 2008-11-29 20:49

CAIRO -- Saudi Arabia's king says the price of oil should be $75 a barrel, much higher than it is now, but his oil minister indicated Saturday that no measures will likely be taken until OPEC meets again next month.

Saudi oil minister Ali al-Naimi is surrounded by journalists during the Organization of Arab Petroleum Exporting Countries (OAPEC) meeting in Cairo, Egypt, Saturday, Nov.29, 2008. [Agencies]

Saudi Oil Minister Ali Naimi said that the Organization of Petroleum Exporting Countries will "do what needs to be done" to shore up falling oil prices when the cartel meets Dec. 17 in Algeria.

Naimi did not entirely rule out the chance that the cartel would slash output at a hastily convened meeting of OPEC members in Cairo Saturday, but he said the bloc needs to wait until the Algeria meeting to assess the impact of earlier production cuts.

His comments came after Saudi King Abdullah told the Kuwaiti newspaper Al-Seyassah in an interview published Saturday that oil should be priced at $75 a barrel.

"We believe the fair price for oil is $75 a barrel," he said, without saying how the price could be raised.

The price of crude stood at about $147 a barrel in mid-July. On Friday, the US benchmark West Texas Intermediate crude for January delivery was trading at about $54 per barrel.

The king was echoed by Qatar's Oil Minister Abdullah Bin Hamad al-Attiya, who told the Arab news channel Al-Arabiya that prices needed to rise to guarantee investment into the oil sector.

"The price between 70 to 80 (dollars a barrel) is the one encouraging in investment and developing new or current oil fields," he said. "It falls below 70 (dollars), the investment would freeze, which will lead to a crisis in supply in the future."

The cartel has already held an emergency meeting in Vienna on Oct. 24 to announce a production cut of 1.5 million barrels per day.

The cut failed to stop the price drop, and the cartel hastily convened the Cairo gathering on the sidelines of the Organization of Arab Petroleum Exporting Countries' meeting.

"There is total confusion" among OPEC's 13 members, said Fadel Gheit, managing director of oil and gas research at Oppenheimer & Co. in New York. "These people ... really have no business model. They basically thrive when oil prices go up, and now they are crying uncle when prices go down."

And down they have gone, in an avalanche sped along by a world financial meltdown that also threatens to cut deeply into OPEC member states' government budgets.

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