OPEC can live with $50 oil for 2009: Secretary General

By Ikuko Kao and Muriel Boselli
PARIS (Reuters) - OPEC may be able to live with oil prices around $50 a barrel in 2009, its Secretary General said on Thursday, another sign the group has limited its price aspirations for now because of the weak global economy.

The comments are the first indication from the Organization of the Petroleum Exporting Countries of how long it can withstand oil at $50, below the $70-$75 many in OPEC and the oil industry say is needed to encourage investment in new supply.

"We cannot really invest at current oil prices. Maybe we can live with it this year," Abdullah al-Badri told a conference in Paris. "The cost of adding new capacity is still high."

Badri added: "2009 is the most difficult year for the world to live."
While painful for producers, cheaper oil equates to a large economic stimulus for consumers and oil producers stand to benefit in that a stronger economy encourages demand for fuel.

When it met in March, OPEC decided against a new output reduction to bolster prices, saying it was waiting to see the outcome of a G20 summit -- taking place in London on Thursday -- that investors hope will deliver measures to restore growth.

PRAGMATIC
The oil minister of Qatar, who is also attending the Paris conference, made similar remarks to Badri's.
"I say the current price of $50 is more pragmatic related to the world economic crisis," Abdullah al-Attiyah said. "We cannot be dreamers."

Its members have delayed 35 projects to expand supply, Badri said in February.
At Thursday's Paris conference, Total CEO Christophe de Margerie said many oil companies were delaying big projects to preserve cash and his company might not meet its plan to invest $18 billion this year.