September 14, 2007 -
OPEC secretary-general Abdalla el-Badri on Friday said the oil
producer group did not believe current record oil prices would
last, saying they were not justified by market fundamentals or
any shortage of crude.
Speaking to reporters in Vienna, Badri said the record prices
of above $80/barrel seen on the New York Mercantile Exchange
this week were "too high" and that OPEC did not want to see
prices at such levels.
Earlier this week OPEC agreed to raise output by 500,000 b/d
in a bid to ease high prices, and Badri said the cartel was
ready to act again if high prices persist.
"We are all bothered about why we reach $80--fundamentals do
not support $80," Badri said.
"It is too high and we are not in favor of a high price and
we are not in favor of a low price...I told you before, if the
price keeps increasing we will increase our production and we
did. I don't think this $80 will last," he said.
Badri said the spike in prices this week, which came despite
the OPEC production increase, was due largely to
hurricane-related supply fears in the Gulf of Mexico, an attack
on a gas pipeline in Mexico and refinery problems in the US.
"We don't think about a permanent $80. We see that our
increase coincided with the explosion in Mexico and the
hurricane in the Gulf of Mexico," he said. "It is more or less a
product shortage rather than a [crude] shortage."
Badri said all OPEC members had supported the production
increase, with the only debate being on the timing of the move,
due to take effect from the start of November.
"There was no disagreement about the increase...the
discussion was about when. The loading schedule for many
countries for October is done but there was really no
disagreement about the increase, it was about when it would take
effect."
Badri said OPEC had no price target of its own, but wanted a
"fair price" to encourage investment.
OPEC's newest member Angola is due to join the output quota
system at the start of 2008, but Badri said there was no
indication yet of what the country's initial allocation might
be.
Badri denied that there was an understanding that Angola
would be allowed to increase its production to 2 million b/d
before joining the quota system.
