OPEC chief sees oil at $110 a barrel as fair

AP News
Posted: Jun 15, 2012 7:57 AM
OPEC chief sees oil at $110 a barrel as fair

Oil prices could rise about $25 from their present levels to $110 a barrel without threatening the world economy, OPEC Secretary General Abdullah Al-Badry said Friday.

Crude prices have dropped steeply in recent months with the U.S. benchmark selling Friday at just below $85 a barrel. That's about 20 percent less than where they were in February, and Al-Badry said it's far below what consumers can afford.

"$110 is not a threat to the world economic growth," Al-Badry told reporters a day after OPEC oil ministers agreed to keep the cartel's total output ceiling at 30 million barrels a day.

Many of the 12 member nations of the Organization of the Petroleum Exporting Countries consider present prices too low and came to Thursday's meeting seeking a production cutback to reduce supplies and push prices upward.

That, however, was opposed by OPEC kingpin Saudi Arabia _ and Saudi oil minister Ali Naimi had even initially suggested he was looking for a production boost. The Saudis have signaled their readiness to make up for any shortfall caused by international embargoes on Iranian crude and already account for about a third of total daily OPEC output of nearly 32 million barrels, including Saudi and other overproduction.

The oil sanctions against Iran are part of a series of international economic penalties being imposed to push the Iranian government into curbing uranium enrichment.

The United States and other governments fear Iran is enriching uranium to make nuclear weapons. Iran, however insists it is enriching only to make reactor fuel for peaceful nuclear energy uses.

The international concerns are sparked by Tehran's refusal to accept nuclear fuel from abroad.