Oil prices of $100 a barrel may indicate "something wrong with fundamentals" in the market and lead OPEC to act, said Abdalla El-Badri, the organization’s secretary-general.
Current prices are at “suitable levels,” El-Badri said today in Quito, Ecuador, where OPEC will meet Dec. 11 to review its output. Demand is growing very fast in China and India and moderately in members of the Organization for Economic Cooperation and Development, he said.
“When the price goes to $100, that means there is something wrong with the fundamentals, then we have to do something,” El-Badri told reporters. “If it goes to $100 because of speculation, OPEC could not move.”
OPEC, which supplies about 40 percent of the world’s oil, hasn’t changed quotas since late 2008, when it announced the biggest-ever reduction in output as global demand collapsed and prices plummeted. Ali al-Naimi, oil minister of OPEC’s de facto leader Saudi Arabia, said Nov. 1 that crude-importing countries are happy with prices between $70 and $90, a higher range than the spread of $70 to $80 he cited on March 30.
Crude oil for January delivery rose 58 cents, or 0.7 percent, to $88.86 a barrel at 1:05 p.m. on the New York Mercantile Exchange. The price exceeded $90 a barrel on Dec. 7 for the first time in two years.
Shokri Ghanem, chairman of Libya’s National Oil Corp., said in an interview yesterday that OPEC may alter its production strategy next year if prices breach $100.
“At this time the market is in a really comfortable way and we don’t want to disturb it,” El-Badri said today. Compliance with OPEC’s existing output guidelines is 55 percent this month and about 61 percent as an average for 2010, he said.