OPEC: Low crude detriment to investments

March 6, 2009 at 5:26 PM
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VIENNA, March 6 (UPI) -- Low oil prices may help industry and consuming nations now, but the head of OPEC warned they would cut into investments and raise prices in the long run.

"Oil prices need to be at levels to help sustain economic growth by supporting longer-term energy-industry investments across the board," said Abdalla Salem El-Badri, secretary-general of the Organization of Petroleum Exporting Countries.

His comments came in response to statements from the rival International Energy Agency, which said the world economy would see a $1 trillion stimulus if oil prices held at $40 per barrel throughout 2009.

Oil gave up more than $100 per barrel from its July highs near $147, settling at around $40 per barrel since September despite OPEC production cuts to control declining prices.

In response to stark comments from the IEA regarding OPEC production decisions, the OPEC secretary-general said his cartel "always" makes decisions based on "careful analysis of all the various inputs and in the interest of market stability."

Several analysts expect OPEC to announce further production cuts at its regular meeting in Vienna on March 15.

Oil production from OPEC nations dropped 770,000 barrels per day from January levels to about 27.78 million bpd in February.

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