Qatar oil min says $70 right price for oil

“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 Petrotech, India’s biggest oil and gas conference.

Attiyah said he did not favour very high prices.

“$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,” he said.

OPEC decided to cut supply by 2 million barrels per day (bpd) at meetings in September and October. In December it agreed to lower output by a further 2.2 million bpd from Jan. 1.

Attiyah said members of the Organisation of the Petroleum Exporting Countries (OPEC) had complied with the cuts.

“So far, so good,” he told reporters.

In late November, when oil prices were around $55 a barrel, Saudi Arabia said $75 a barrel was a fair price, the first time in years that the world’s biggest exporter identified a price target.

On Wednesday, U.S. crude CLc1 rose over 3 percent 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. [ID:nLE263762]

While oil producers contemplated ways to prop up crude prices, Attiyah said gas producers did not have the same 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,” Attiyah said.

Qatar is the world’s largest LNG exporter.