LONDON — OPEC's secretary-general said oil prices as high as $200 a barrel is possible if there's a lack of investment in new supply. “If you don't invest in oil and gas, you will see more than $200,” Abdullah Al-Badri said in an interview in London Monday. Brent, the global benchmark, erased an earlier 2.5 percent decline, trading as high as $48.94 in London.
Crude oil prices collapsed almost 50 percent last year as Saudi Arabia and other members of the Organization of Petroleum Exporting Countries said they won't curb output in response to a surplus. That excess is 1.5 million barrels a day, Al-Badri said.
Oil prices turned positive on Monday, erasing early losses after the Secretary-General of the OPEC producer group said he expected the market to bottom out around current levels.
March Brent crude LCOc1 was trading at $49.13 per barrel by 1317 GMT, up 34 cents, bouncing from an early low of $47.57.
"Now the prices are around $45-$55 and I think maybe they reached the bottom and will see some rebound very soon," Al-Badri said.
West Texas Intermediate (WTI) crude for March delivery CLc1 was at $45.94 a barrel, up 35 cents. Front-month WTI had touched an intraday low of $44.35, just above the $44.20 hit on Jan. 13, which was its lowest level since April 2009.
After a smooth transition in Saudi Arabia following the death early on Friday of King Abdullah, both Brent and UScrude price fell early on Monday. The new ruler, Custodian of the two Holy Mosques King Salman, was quick to retain veteran Saudi oil minister Ali Al-Naimi on Friday, in a message aimed at calming a jittery market.
Money managers cut their net long US crude futures and options positions in the week to Jan. 20, the US Commodity Futures Trading Commission said on Friday.
Oil services firm Baker Hughes (BHI.N) published data on Friday that showed the number of US oil rigs fell for a seventh straight week to 1,317, the fewest since January 2013.
Germany-based Commerzbank said that output would remain high in the short term but production from US oil rigs would continue to dwindle in the coming weeks, eventually supporting prices.
"It is only a question of time before this is reflected in decreased oil production," Commerzbank analysts said in a note to clients on Monday. "In our opinion, this indicates that prices will recover in the second half of the year." — Agencies
