A minimum price of $65 a barrel for oil is “badly needed at the moment” according to Qatari energy minister Mohammed bin Saleh al-Sada.
On Tuesday, the Qatari minister told the Associated Press that crude has not been trading at a “fair price."
The two-year steep drop in oil prices sets the stage for the next meeting of the Organization of Petroleum Exporting Countries in Vienna on June 2nd.
The minister, who also serves as the head of OPEC, did not rule out the possibility of, once again, suggesting that member countries halt production to force the price of oil up. Related: Key Pipeline Could Unleash Alberta’s Oil Sands
The 13-member bloc’s last meeting in April failed to result in a production freeze after Saudi Arabia backed out of a negotiated deal at the last moment.
Iran has also said it would not participate in proposed freezes as it builds its capacity to pre-sanctions levels over the course of 2016.
The oil market’s recovery has been “slow and steady,” al-Sada said, adding that the “fundamentals” of the sector indicate that it is “heading in the right direction.” Related: Saudi Market Share Takes A Hit As Russia Doubles Oil Exports To China
The $65 ‘fair price’ would encourage investment in the ailing oil markets and secure future oil supply, the minister said.
After last month’s OPEC summit in Doha failed to construct a united front against low oil prices, the head of Rosneft, Russia’s largest oil company, commented that the cartel "has practically stopped existing as a united organization.”
Russia and OPEC are natural rivals, although there has been a sense of shared hardship, especially after the discovery of shale in the U.S., when both parties began pumping more and more crude to preserve their market share.
Saudi Arabia, known to be OPEC’s de facto leader, competes with Russia to supply oil and natural gas to China - the world’s second largest energy consumer.
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By Zainab Calcuttawala for Oilprice.com
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