VIENNA: Global economic recovery will not be in jeopardy if the price of oil rallies to $90 a barrel, and crude prices are unlikely to rise as high as $100 next year, according to OPEC. The Organization of Petroleum Exporting Countries, responsible for 40 percent of worldwide crude supplies, is comfortable with oil prices at between $70 and $85 a barrel, the group's secretary-general said Friday. Saudi Arabia's Oil Minister Ali Al-Naimi said in Singapore on Nov. 1 that a range of between $70 and $90 a barrel is satisfactory. The Kingdom had previously indicated a preferred target of $75 a barrel. “I don't think we'll see $100 oil in 2011,” Secretary- General Abdullah El-Badri said at a press conference in Vienna held to launch OPEC's annual long-term outlook. Crude for December delivery climbed to a six-month high of $86.68 a barrel Friday on the New York Mercantile Exchange after the Federal Reserve said yesterday that it would expand record measures to spur growth in the US, the world's largest crude consumer. Financial speculators are not as “aggressive” in driving oil prices this year as they were in 2008 and 2009, El-Badri said. Speculators are typically considered to be buyers and sellers of futures contracts without a need for physical barrels of oil, such as hedge funds. OPEC forecast in its World Oil Outlook that global oil demand will increase 5.1 percent to 89.9 million barrels a day in 2014 from this year, and grow to 105.5 million a day in 2030. OPEC raised estimates for global oil demand through to 2014 on growth in Asia, and forecast that alternative supplies will restrain the world's need for its crude. That's 800,000 barrels a day more than it predicted last year. OPEC cut the demand forecast for its own crude by 900,000 barrels a day on rising use of natural gas liquids and non-conventional oils such as biofuels. “A swifter-than-expected recovery from the global recession has led to positive impacts upon oil demand,” the group's World Oil Outlook report said. “The expanding role that non-crude forms of liquid supply will play in satisfying demand is an important feature.” Producers outside OPEC will increase output of crude, natural gas liquids, and non-conventional oils by 2.2 million barrels a day to 53.3 million a day by 2014, limiting the need for extra supplies from OPEC. The growth is driven by Canadian oil sands projects and Brazilian biofuels. Natural gas liquids, or NGLs, are excluded from OPEC's production figures and the quota system that applies to 11 of OPEC's 12 members. OPEC's output of NGLs will grow by 1.5 million barrels a day to 6.2 million a day in 2015, from 4.7 million this year, according to the report. The organization cut its 2014 forecast for consumption of its own crude to 30.6 million barrels a day. That means it will still need to increase crude production by 1.3 million barrels a day in four years' time from 29.3 million a day this year. China's demand for crude will increase 21 percent to 10.5 million barrels a day in 2014, and then to 10.9 million a day in 2015, from 8.7 million a day this year, according to the report. Global consumption will reach 91 million barrels a day in 2015, it said. “All of the oil demand increase over the medium-term is from developing countries, and over two-thirds of this growth will come from developing Asia, with China seeing the largest expansion,” OPEC said. In London, oil eased from a two-year high Friday, but losses were limited by the new round of US economic stimulus, which has boosted the appeal of commodities as an asset class in an environment of a weak dollar. US crude futures were down 12 cents at $86.37 a barrel by 1128 GMT, having touched $87.22 earlier, the highest intra-day price since October 2008. ICE Brent futures dipped by 25 cents to $87.75. Investor appetite for risk is expected to continue grinding down the low-yielding dollar after the US Federal Reserve's commitment this week to open-ended purchases of Treasuries renewed the focus on the dollar as a funding currency. “The issue that we have to look at is the financial side and the injection of money,” said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd. The dollar was mired near 11-month lows against a basket of currencies. A declining dollar boosts the appeal of commodities as a way to preserve value.
