OPEC Says $80 Oil Won't

OPEC Says $80 Oil Won't Last Due to `Fundamentals'
Sept. 14 (Bloomberg)
By Fred Pals

OPEC, whose members produce more than 40 percent of the world's oil, said crude at $80 a barrel won't last because ``fundamentals'' don't support the price.

``I don't think the price will stay at $80,'' Secretary General Abdalla el-Badri said today at a press conference in Vienna. ``The fundamentals don't support that.'' The price of $80 a barrel is ``too high,'' he added.

The Organization of Petroleum Exporting Countries unexpectedly agreed to increase oil production by 500,000 barrels a day at a ministerial meeting in Vienna on Sept. 11. The increase, which will be added to the current 26.7 million-barrel-a-day output of 10 OPEC members, starts Nov. 1.

Oil prices gained after OPEC's decision to raise supply, when the U.S. Energy Department reported the country's stockpiles of crude fell more than expected last week. That suggested the increase may not be enough to meet demand as winter approaches in the Northern Hemisphere. Hurricane threats and an attack on Mexican pipelines have also driven up oil prices over the past few days.

Crude oil for October delivery traded down 18 cents at $79.96 a barrel at 9:06 a.m. local time on the New York Mercantile Exchange. The contract rose above $80 a barrel yesterday for the first time, touching $80.20.

December Meeting

El-Badri declined to comment on whether OPEC would discuss raising output again at its December meeting if crude prices remained near their current levels. ``Of course, we will discuss supply, demand and inventories, as usual,'' he said.

OPEC is not pursuing any specific price target or range, El- Badri said. ``It has been a long time ago since we've had a range,'' he said. OPEC having a specific target is ``rubbish.''

Angola, the African nation which joined OPEC on Jan. 1 this year as its 12th member, is expected to have a production quota next year, and El-Badri said he hopes to announce that level at OPEC's December meeting. He declined to comment on whether Angola would get a quota as soon as it reached production of 2 million barrels a day.

Exxon Mobil Corp., BP Plc and other international oil companies see Angola as a growth area. They're finding it harder to expand oil and gas production in other resource-rich countries such as Russia and Venezuela.