Saudi Arabia today identified $75 a barrel as a fair price for oil, the first time in years the world's leading crude exporter has cited a price target.
Saudi oil minister Ali al-Naimi said oil prices needed to return to $75 to keep the more expensive new projects at the margins of world supply on track.
"There is a good logic for $75 a barrel," said Naimi. "You know why? Because I believe $75 is the price for the marginal producer. If the world needs supply from all sources, we need to protect the price for them. I think $75 is a fair price."
Mr Naimi was speaking ahead of an Opec meeting at 3pm in Cairo (1300 GMT) to review progess on cartel output restraints agreed in the past two months that aim to remove 7 percent of its supply from the world market.
Ministers said they were likely to defer a further production cut until their meeting next month.
The Saudi comments are likely to come as a relief to major oil consumer countries hoping OPEC will not seek to push crude prices back towards $100 barrel during a recession.
Benchmark US crude closed at just over $54 a barrel on Friday having peaked at $147 in July.
The first priority for Opec is to prevent prices, hit hard by a slump in fuel demand in the West, falling any further.
Reuters
