EMEA News
Qatar: $65 Oil is "Fair" and "Badly Needed"
Whether it's $50 or $75 per barrel, analysts agree that higher oil prices are necessary to kick-start much needed investment – and so too does Mohammed bin Saleh al-Sada, energy and industry minister for Qatar, who has pegged the threshhold at a minimum of $65 per barrel.
Ship & Bunker data suggests $65 oil would put IFO380 bunker prices in the primary ports at between $294 and $318 per metric tonne (pmt).
Speaking to The Associated Press ahead of the June 2 meeting of Organization of the Petroleum Exporting Countries (OPEC) producers in Vienna, al-Sada said, "We need to have a fairer price so that we can have the ability to invest more in order to secure the energy supply to the world and avoid any price shock."
He added that while the oil market is "recovering slowly but steadily" and fundamentals show "it is heading in the right direction," he warned that the security of future supplies is at risk because of the overall price slump.
Tom Ward, co-founder of Chesapeake Energy, recently exploded the widely-held assumption that $50 oil will inspire renewed investment by stating that $75 per barrel is required, due to capital markets being closed to drillers - who in turn need to outspend cash flow to increase production.
Unlike other observers, al-Sada believes the failed meeting in Doha in April to discuss a freeze in production was beneficial, because participants had a chance to talk about "new market fundamentals."
He also didn't rule out that freeze discussions might arise again at the Vienna summit: "If OPEC and non-OPEC major producers think that the revival of it is necessary, it's all open and on the table all the time."
In response to Venezuela recently suggesting that non-OPEC members take part in the meeting, al-Sada said, "We are in the consultation about it, whether it is appropriate to have it in the meeting, parallel to the meeting, or after the meeting."
Whether al-Sada is being overly-optimistic or merely diplomatic, all signs point towards no freeze talks in Vienna: Saudi Arabia scuttled the Doha congregation due to its insistence that all parties agree to a freeze, including Iran, but earlier this week Rokneddin Javadi, deputy oil minister for the Islamic Republic, stated that his country will continue on its path of boosting oil exports to pre-sanction levels.
