OPEC President Is ‘Happy’ With Oil in $75-$78 Range

Nov. 16 (Bloomberg) -- The Organization of Petroleum Exporting Countries is “happy” with crude oil prices between $75 and $78 a barrel, said the group’s president, Angolan Oil Minister Jose Maria Botelho de Vasconcelos.

Current crude oil prices are at a “good level,” he said today at a conference in Abu Dhabi. Global oil demand may rise by 20 million barrels a day to 106 million barrels a day between 2008 and 2030, he said.

Oil prices have climbed by about 74 percent this year, trading above $80 last week, on speculation the pace of the global economic recovery is accelerating. The rebound in prices, which had dropped as low as $32.40 a barrel in December, came after OPEC members agreed to cut production late last year.

The oil “price is not too high,” Botelho de Vasconcelos said. “I think that the economy can recover at this price.” Even $80 a barrel “is not too high,” he said.

Oil today rose from a one-month low. Crude oil for December delivery advanced as much as $1.21, or 1.6 percent, to $77.56 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $77.25 at 11:18 a.m. in London.

OPEC, supplier of about 40 percent of the world’s oil, sees “uncertainty” in the oil market, Botelho de Vasconcelos, said. Sustained investment in exploration and production can help avoid future price volatility, he said.

The group’s average compliance with its goal of cutting output is about 65 percent, he said, adding that “this level is good for us.” Compliance with agreed cuts slipped to about 60 percent in October, from 62 percent in September, according to data from OPEC’s own monthly report, published Nov. 11.

Forward Inventory Cover

Oil inventories are equal to about 62 days worth of oil use, the OPEC President said. The so-called forward cover “should ideally be about 52 or 53 days,” which would help balance the market, he said.

OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The 11 members bound by supply quotas pumped 26.523 million barrels a day last month, compared with a formal limit of 24.845 million per day, according to OPEC’s latest monthly report, which uses data from secondary sources including analysts and news agencies. Iraq is exempt from quotas.

OPEC members are scheduled to meet on Dec. 22 in Luanda to review production quotas that the group left unchanged at three gatherings in 2009. OPEC last agreed to increase supply targets in September 2007.

Luanda Meeting

The OPEC President declined to predict whether OPEC would change quotas at the Luanda meeting, saying only: “you must wait.” On Nov. 13, he had said OPEC members may keep current production levels when it meets next month.

Qatar’s energy minister Abdullah bin Hamad al-Attiyah said in Tokyo today he doesn’t expect OPEC to decide to increase crude oil production at its next meeting in December.

Asked whether oil should continue to be priced internationally in U.S. dollars, Botelho de Vasconcelos replied that that issue requires further reflection within OPEC.