Iran official says $100 oil price ‘appropriate’

Iran’s Opec governor said an oil price of $100 per barrel was ”appropriate” in current conditions, the Oil Ministry’s news agency Shana reported on Friday.

The oil minister of the world’s fourth-largest crude producer had said earlier in the week that $100 a barrel was the lowest appropriate price. Crude has tumbled from a record $147 in July and was trading on Friday at below $107.

Opec governor Mohammad Ali Khatibi, speaking four days before a ministerial Opec meeting in Vienna, also reiterated Iran’s view that Opec members should cut output to their agreed targets so that oversupply on the market was reduced.

”The $100 per barrel price, in the current conditions, is appropriate,” Shana quoted him as saying. Khatibi added that the price ”should change based on conditions and expenses that are created in the future”.

Oil Minister Gholamhossein Nozari on Tuesday had said Opec must discuss crude oversupply when it meets and again indicated that Opec’s second largest producer wanted the group to prevent oil from hitting $100 a barrel, according to the IRNA news agency.

Nozari had earlier said $100 was the lowest appropriate price.

Iran is traditionally hawkish on price. Another price hawk, Venezuela, said record prices near $150 were ”irrational” and that they would probably settle around $100.

Khatibi earlier this week told Reuters Opec may need to cut oil supplies by as much as 1,5-million barrels per day, or nearly 5%, to balance global markets by early next year.

Shana quoted him as saying: ”Opec members should reduce their production to their quotas so that oversupply in the market is reduced so that the market reaches a balance.”

”If this Opec decision leads to stability in the market there is no need for any other action. Otherwise Opec should make new decisions,” Khatibi said without elaborating.

The Organisation of the Petroleum Exporting Countries does not officially have quotas but the term is sometimes used to describe agreed output targets for each member country. Some, notably Saudi Arabia, have been producing above these targets.

Khatibi said cold weather in the coming winter, improved global economic conditions and a stronger US dollar could boost the market.

”But because we don’t know the change of these conditions in the future, one cannot predict a precise [oil] price,” he said. – Reuters

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