Big producers call for 'decent' oil price

Big producers call for 'decent' oil price

Omar Hasan, Agence France-Presse, Riyadh

OPEC kingpin Saudi Arabia and independent producer Norway
called Tuesday for a "decent" price for crude to guarantee oil
market stability and forecast a brighter economic outlook in the
second half of 2002.

Saudi Oil Minister Ali al-Nuaimi and Norwegian counterpart
Einar Steensnaes, who arrived in Riyadh on Monday on a two-day
visit, told a press conference that all producers wanted to see a
"decent price."

Nuaimi said the price should "not be significantly less than
20 dollars and not significantly higher than 20 dollars" a
barrel.

Norway, a non-OPEC state and the world's third largest oil
exporter, announced in December that it would cut output by
150,000 barrels per day (bpd) between January 1 and June 30 as
part of efforts to strengthen prices.

"The prices today are what we expected," Nuaimi said. "What we
want is stability in the prices and not movement up and down."

"I believe that the cooperation of all oil producers is
helping to lessen wide movement of prices."

The Organisation of Petroleum Exporting Countries slashed
production in December by 1.5 million bpd in a bid to lift
prices, under a rare agreement with rival non-OPEC oil producing
countries which also pledged cuts of more than 460,000 bpd.

Steensnaes said that signs of recovery in the global economy
"make us optimistic" in establishing a proper balance between
supply and demand.

"We are recovering from the decrease in the oil prices because
of the September 11 attacks in the United States, and a mild
winter, which caused an imbalance in the market," Steensnaes
said.

"We could be more optimistic in the second half of the year
because of global and US economic recovery. In the second half,
we may suspend the cuts," he said. "We aim at establishing a
proper balance."

Nuaimi said he expected the world economy to improve in the
second half of the year and the demand for oil to grow. "We
believe that prices will improve too," he said.

Steensnaes added that Russia, which said last week that it
could boost oil exports from the second quarter of the year if
growth resumes in the United States and Europe, also wanted a
"decent price" for oil.

"In fact all producers favour this because higher prices will
slow down the economy.

"I am confident the Russians assess the situation the same way
others do. They promised to stick to their commitment of
production cuts," the Norwegian minister said.

Nuaimi said world demand for crude, which currently stands at
76 million bpd, was expected to drop by 1.5 million bpd in the
second quarter, but declined to say what action OPEC would take.

"When OPEC takes a decision, we take into account the whole
year and not only one season. In every meeting we review our
decisions and amend them based on new information," he said.

"Based on the information we have, it's difficult to say what
we are going to do at our next meeting" in March, said Nuaimi,
adding that "compliance with output cuts now is much better than
before."

London Brent futures fell 32 cents to US$21.12 a barrel on
Tuesday and U.S. light crude eased 47 cents to $20.94 a barrel
but dealers said markets remained panicky after a sharp jump on
Monday.

Brent rocketed $1.74 in the last 90 minutes of Monday trade
when dealers got wind that Royal/Dutch Shell might take all
available physical Brent cargoes for March.

Dealers said Shell had told them it had demand for the entire
March Brent program, sparking panic buying among those short of
Brent futures.