Qatar's oil minister said Monday he was “OK” with crude oil at $50 per barrel for this year, reflecting a measure of pragmatism by OPEC as the producer bloc struggles to buoy oil prices hammered by the global economic meltdown. Abdullah Bin Hamad Al-Attiyah's comments came as energy experts renewed warnings that the world faced the possibility of major oil price volatility if sufficient investments are not injected into developing the energy sector. Oil prices tumbled below 50 dollars per barrel on Monday as the dollar strengthened and stock markets took a hit on renewed concerns for the global economy and the struggling auto sector. New York's main futures contract, light sweet crude for delivery in May, dropped $3.97 from Friday's closing price to $48.41 per barrel, falling under $50 for the first time since March 18. New York prices fell as low as $48.11 per barrel after they had shot up last week to nearly $55 amid economic recovery hopes arising from better-than-expected economic data. In London , Brent North Sea crude for May shed $3.99 to $47.99 a barrel, after earlier passing under the psychological $50 barrier for the first time since March 20. Separately, Kuwait announced that it had raised production capacity to 3 million barrels per day and was on target to hit its goal of 4 million barrels per day by 2020. Al-Attiyah, whose country is one of the 12 members of the Organization of the Petroleum Exporting Countries, said he was “trying to be more pragmatic” about prices and that $50 is and “OK price for 2009” given the current economic climate. He spoke on the sidelines of an energy conference in Kuwait. OPEC has been working to boost oil prices that have fallen by over 60 percent from mid July highs of $147 per barrel. The group refrained from announcing new production cuts during its March meeting in Vienna, opting instead to focus on greater compliance with an earlier 4.2 million barrel round of cuts from September levels. That focus has helped OPEC at least establish a price floor, with the front-month light sweet crude oil contract for May delivery holding at around $50 per barrel - about $10 per barrel higher than prices last month. Even so, several OPEC members - led by group powerhouse Saudi Arabia - have said pegged $75 per barrel as a price that is fair for consumers and allows producers to secure the investments needed to sustain current production capacity and bring new fields on line. Experts have warned that without major new investment, the world could face new price spikes in crude oil. Echoing those concerns, Noe van Hulst, the secretary-general of the Saudi-based International Energy Forum whose producer-consumer members account for more than 90 percent of global oil and gas supply and demand, said around $12 trillion in oil and gas investments were needed by 2030, roughly $500 billion per year. “And, in this environment, with these prices, with ... weak demand in the short term, this is a tremendous challenge,” he said at the conference. “I think we all worry about that.” He warned that if investments were delayed too much, there will be “an impact on future supply and adverse consequences for the market and for the world economy.” Several OPEC members are facing major budget challenges stemming from the decline in oil prices, with the slide undercutting efforts to boost production capacity. Saad Al-Shuwaib, chief executive officer d Kuwait Petroleum Corp., told reporters that Kuwait was “revising” its plans to develop its oil sector in light of lower oil revenues. But Al-Shuwaib stressed that plans that “will affect production capabilities in the future” will not be impacted. He said Kuwait's production capacity has reached 3 million barrels a day and its plans targeting 4 million barrels a day by 2020 were on track.
