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Saudi King: oil must be $75 per barrel

King Abdullah

CAIRO: Saudi Arabia’s King says the price of oil should be $75 a barrel, much higher than it is now, but his Oil Minister indicated on Saturday that OPEC will not decide whether to cut output until the body meets again next month.

Saudi Oil Minister Ali Naimi said that the OPEC would “do what needs to be done” to shore up falling oil prices when the group meets on December 17 in Algeria, but for now it was “too early.”

Mr. Naimi, whose country dominates OPEC, told reporters at an interim meeting of OPEC Oil Ministers in Cairo the bloc needs to wait until the Algeria meeting to assess the impact of earlier production cuts.

Other Ministers, however, did not decisively rule out cuts, with top Libyan oil official Shokri Ghanem saying “all options are open” ahead of the Ministers’ meeting. The comments came after King Abdullah told the Kuwaiti newspaper Al-Seyassah in an interview published on Saturday that oil should be priced at $75 a barrel.

“We believe the fair price for oil is $75 a barrel,” he said, without saying how the price could be raised.

“The price of crude stood at about $147 a barrel in mid-July. On Friday, the U.S. benchmark West Texas Intermediate crude for January delivery was trading at about $54 per barrel.

The King was echoed by Qatar’s Oil Minister Abdullah Bin Hamad al-Attiya, who told the Arab news channel Al-Arabiya that prices needed to rise to guarantee investment into the oil sector.

“The price between 70 to 80 [dollars a barrel] is the one encouraging in investment and developing new or current oil fields. It falls below 70 [dollars], the investment would freeze, which will lead to a crisis in supply in the future,” he said. — AP

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