New Delhi: A price of $70 a barrel is right for oil to keep companies and producers investing in new resources, Qatar’s oil minister said on Wednesday.
“Low oil prices will reflect a freeze in investment in new resources. When growth comes back, we will have another shock, as resources will not be there to meet demand,” Abdullah al-Attiyah said on the sidelines of the Petrotech conference.
Attiyah said he did not favour very high prices either.
“$70 will be an incentive to companies and oil producers to keep investing. Oil prices over $100 are not logical. I also don’t appreciate low oil prices.”
In late November, when oil prices were around $55 a barrel, Saudi Arabia said $75 a barrel as a fair price for oil, the first time in years that the world’s biggest exporter identified a price target.
On Wednesday, US crude rose over 3% to about $39 a barrel as OPEC kept up its talk of production cuts and a cold snap in the United States boosted heating oil demand.
While the oil producers are contemplating ways to prop up crude prices, Attiyah said gas producers did not have such an agenda.
“Unlike oil, gas and LNG are 25-year, long-term take-or-pay contracts driven by a formula. This is different from oil as gas is still on long-term contracts. Maybe 20-30 years later these contracts will convert into spot,” he said.
Energy ministers of 12 gas exporting countries met in Moscow last month to create the Gas Exporting Countries Forum.
“They have already signed a statute in Moscow. Qatar will be the headquarters for the international gas forum organisation,” he said.
Qatar ist the world’s largest LNG exporter.