Gulf OPEC Delegate Says Oil at $60 OK for Now: Report

Riyadh: Oil prices have started to stabilise around current levels of $60 per barrel and demand is showing signs of improving in Asia and other regions, a senior Gulf OPEC delegate said on Tuesday.

The comments indicate that the core Gulf members of the Organization of the Petroleum Exporting Countries (OPEC) are showing no sign of wavering in their strategy to focus on market share rather than cutting output, despite concerns from other members about falling oil revenue.

"Oil prices seem to stabilise around the current level ... there are a lot of indications showing that demand is growing," the senior Gulf OPEC delegate told Reuters. "The market is stabilising as well as prices," the delegate said, adding that $60 a barrel is "okay for now".

Oil traded higher near $60 a barrel on Tuesday, up more than 30 per cent from a near six-year low close of $45 on January 13. Prices collapsed from $115 in June due to oversupply, in a decline that deepened after OPEC refused to cut output.

The delegate said oil demand was showing signs of recovering in Asia, emerging economies, Latin America and the United States. It is expected to grow more strongly in the second half of 2015 as the global economy picks up, helping to absorb excess crude supply in the market, he added.

At OPEC's last meeting in November, Saudi Arabia and its Gulf allies argued that the group needed to ride out lower prices in order to defend market share against shale oil and other competing supply sources, rather than cut output.

The price decline since last year has hurt the economies of smaller OPEC producers, whose budgets depend more on higher oil prices than the Gulf members, and some of them have continued to lobby for OPEC cuts.

In a sign of concern about the impact of the price collapse, Nigerian Oil Minister Diezani Alison-Madueke told the Financial Times she would call an emergency OPEC meeting if oil prices fell any further.

But the senior Gulf delegate added OPEC was unlikely to meet before its next scheduled gathering in June, and defended its November decision not to cut output since non-OPEC countries did not offer to help.

"It is unlikely to have an emergency meeting especially with the market and prices starting to stabilise," he said.

"OPEC has to keep its market share and not to sacrifice for other producers outside the group. Russia and other non-OPEC producers still refuse to cooperate with OPEC."