Iraq oil minister sees oil prices as acceptable

Filed on June 26, 2010

BAGHDAD - Iraqi Oil Minister Hussain Al Shahristani said on Saturday he viewed current oil prices of between $70 and $80 per barrel as acceptable and balanced, and likely to endure for the rest of the year.

‘These prices seem acceptable and balanced in the oil market and it’s expected to continue,’ Shahristani told reporters in Baghdad when asked if the price range of $70 to $80 per barrel was likely to persist for the rest of 2010.

He said the oil producer’s group OPEC had spare capacity and could add output at any time.

‘We have spare capacity in the OPEC countries to increase supply if we found there was a market for it but the demand so far has not picked up as quickly as we hoped and we are waiting for economic recovery to influence demand,’ he said.

Oil prices climbed to a seven-week high above $78 per barrel on Friday on fears a tropical storm could form in the Caribbean and threaten production in the Gulf of Mexico. But crude prices fell to below $65 a barrel in mid-May as a sovereign debt crisis unfolded in Europe, casting doubt on the global recovery.

‘I think the market is balanced, supply and demand are balanced, and that has been the reason in my view why the prices have stabilised around $75-80 over the last few months,’ Shahristani said.

Shahristani, whose country is an OPEC member, said there had been an economic recovery in the United States.

But he said most of the growth in oil demand was expected to come from Asia, driven by China and India, the Middle East and perhaps Latin America.

Demand in Europe had stabilised, he said.

Emerging from years of war, diplomatic isolation and sanctions, Iraq has struck a series of deals that could make it the world’s second largest oil producer after Saudi Arabia. If the deals work out, its output capacity could climb to 12 million barrels per day in seven years from 2.5 million bpd now.

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