Energy leaders on Sunday debated what oil price would spur investment in the sector without hurting a wider global economic recovery, as top producer Saudi Arabia forecast prices eventually moving toward $75 a barrel.
The Group of Eight energy ministers are meeting in Rome against the backdrop of a price rally that has sent oil to a six-month high, prompting key players like the United States to implore OPEC to keep their focus on price stability.
Saudi Arabia, the biggest and most influential of the 12-member producer group, said OPEC would probably stay the course when it meets in Vienna on Thursday, and offered the prospect of an eventual rise in demand and prices.
Demand will pick up eventually when the economy recovers, Saudi Oil Minister Ali al-Naimi told reporters, declining to speculate on when that might happen.
He also declined to predict when prices would reach the $75 level that producers say is needed to encourage investment in new production for the long term.
Eventually could be tomorrow or it could be ten years from now, but eventually its going to happen, but when I don't (know), Naimi said.
The International Energy Agency has said investment in oil and gas production will fall 21 percent in 2009 due to the financial crisis and ensuing economic slump.
Italian oil company Eni's
The experience of the last price cycle demonstrated that to ensure steady economic growth, price should not rise higher than $75 per barrel, Poli said. Oil price instability and unpredictability are the worst enemies of any well thought-out plan to build a different energy future.
Oil rallied to a six-month high of more than $60 a barrel this week, almost double last December's low and well above the $50 level top exporter Saudi Arabia has said it could live with to help nurse the world economy back to growth.
OPEC ministers are expected to make no change to oil supply when they meet in Vienna next week as higher prices ease their concerns about overflowing fuel inventories and the deepest fall in demand for years.
A senior Gulf source has said the group will stick to its current targets, but stress the need for full compliance. Iran's OPEC governor, however said higher oil prices were lulling some OPEC members into a false sense of security.
For graphic on the relationship between OPEC output changes and the oil price, please click on: http://graphics.thomsonreuters.com/059/CMD_OPEC0509.jpg
(Additional reporting by Svetlana Kovalyova, writing by Deepa Babington)