Oil prices are likely to rise and may harm the global economy, OPEC secretary general Abdhullah al-Badri has said.
In an interview with Reuters, the OPEC chief said that the oil cartel’s 33 economists had warned that there will be a need for 2 million barrels per day of oil in the third quarter of the year and 1.5 million barrels per day in the fourth quarter.
However, OPEC talks collapsed last week without agreement to raise production.
al-Badri said: “This shortage of 2 million barrels, if it materialises, in the third quarter and fourth quarter, then the price will go up for sure.”
With oil prices rising on Tuesday, with Brent crude reaching $120 a barrel, al-Badri predicted that there would not be a bull run like in 2008, when US crude hit a high of just above $147 a barrel.
He said: “I don’t think we will see $147. I think now we have spare capacity. I think if consumers will go to member companies and ask for more oil, I’m sure we will sell it to them.
“We don’t want to see a very high price. We don’t want to see a very low price. We would like to see a moderate price. We think high prices will affect world growth.”
Since the OPEC talks collapsed, the Saudi government has said it will increase its oil production to help the market deal with any shortfall. However, there are concerns that this will leave the market without a cushion of extra capacity if more is required, as Saudi Arabia is the only nation that can increase capacity at short notice.