Qatar PM wants "fair" oil prices between $70-90

Tue Nov 11, 2008 6:16 AM EST

business, eu, prices, oil-prices, cyprus, qatar

NICOSIA — Qatar's prime minister said Tuesday "fair" oil prices of between $70 to $90 per barrel would ensure that expensive oil exploration could continue, avoiding price spikes in the future.

Sheikh Hamad Bin Jassim Bin Jabr Al-Thani said during a visit to Cyprus that while oil prices below $70 a barrel would help consumers in the short term, such a price level could later trigger price rallies similar to the one experienced earlier this year, when oil surged to over $147 a barrel.

That is because oil-producing countries need revenue to keep up exploration and production activities. Lower prices mean weaker investment and lower output, which risks boosting oil prices once global economic growth picks up again.

"We think that $70 to $90 is a fair price because you need to keep new exploration to go on and as you know, the investment in the oil is expensive," Al-Thani said during an official 24-hour visit to the east Mediterranean island.

"If the prices go low, that means maybe people enjoy this for a while, but then we will have spikes like we had at the beginning of this year in the prices."

Oil traded just over $60 a barrel Tuesday, the lowest price since March 2007, and has fallen about 59 percent since reaching a record $147.27 in mid-July.

Cyprus and Qatar signed seven agreements on issues including abolishing double taxation, investment protection, health and real estate investment.