Cartel anticipates that light, sweet crude will remain above $50 for next two to three years.
Reuters - March 28, 2006
ROME (Reuters) - World oil prices will stay above $50 a barrel over the next two to three years, while OPEC's reference crude will stay at or above $40, the producer group's head of research said Tuesday.
"In the near future, I mean over two to three years, the OPEC basket price will not go below $40," Adnan Shihab-Eldin said at a conference.
He predicted U.S. light sweet crude would stay above $50 a barrel over the same time period.
The OPEC basket, which is comprised of 11 OPEC-member crudes, generally trades at a discount of more than $6 to the higher-quality light, sweet U.S. crude.
OPEC's reference basket price was steady at $58.02/bbl Monday, while the price of U.S. light crude was 25 cents higher at $64.35 in morning trade.
OPEC crude is predominantly heavier, more sour and difficult to refine than the U.S. benchmark.
Earlier this month, OPEC president Edmund Daukoru, who is also Nigeria's minister of state for petroleum, said the group was aiming to keep U.S. crude oil between the upper $50s to lower $60s and that the producer group would hold talks if prices broke out of that range.
At its meeting March 8, OPEC agreed to keep pumping nearly flat out at 28 million bpd to try to keep prices from straying towards the $70 danger zone and fill any supply gaps.
Shihab-Eldin predicted the Organization of the Petroleum Exporting Countries' output capacity would rise 5 million to 5.5 million barrels per day by 2010 against end-2004 levels.