Tehran (Platts)--7Apr2009

Iran's OPEC Governor Mohammad Ali Khatibi said Tuesday that oil prices
could rise gradually to $60/barrel later this year if OPEC members adhere to
their current production level, official news agency IRNA reported.

"If current OPEC production [including Iraq] continues at 28 million b/d
to the end of the year, oil prices on the global market will increase
gradually to $60/b," Khatibi was quoted as saying.

Iraq is not a party to OPEC's production quotas as it rebuilds its oil
industry. A Platts survey of OPEC's February production put output by all 12
members, including Iraq, at 28.07 million b/d.

The 11 other members bound by production targets agreed last year to
slash production by a combined 4.2 million b/d from a September baseline in an
effort to prop up oil prices, which by December last year had plummeted by
over $100/b from a July record above $147/b as the global economic slowdown
dampened demand for energy in major consuming nations.

Khatibi said that demand for OPEC's oil in the second quarter was
forecast at 28.5 million b/d. He did not identify the source of the forecast.

The International Energy Agency in its monthly oil market report
for February said it expected global demand to fall by 1 million b/d in 2009,
the biggest drop in annual consumption since 1982. It estimated the "call" on
OPEC oil this year at 28.8 million b/d.

"If OPEC members continue to produce the same amount in March as in
February, it means they will supply the market with 500,000 b/d less than
demand. This means 500,000 b/d that will not go into inventories," said
Khatibi.

"If OPEC produces less than demand, prices will move up mildly and might
reach $60/b by the end of the year," he added.

He interpreted what he called the current "mild recovery" in oil prices
as the market's reaction to OPEC's production cuts and to the fact that
members were adhering to their allocated targets in earnest rather than just
on paper.

US light sweet oil crude oil futures prices were Tuesday trading just
above $50/b.
--Aresu Eqbali, newsdesk@platts.com