Oil prices to stay above 6070 dollars: Saudi Arabia

Paris (ANTARA News) - Saudi Arabia's oil minister believes oil prices are set to stay above a minimum price of 60-70 dollars per barrel, signalling a new era for world energy markets, he said in an interview released Sunday.

Ali al-Nuaimi, one of the most influential people in the business as oil minister for the world's biggest crude producer, said "a line has been drawn below which prices will not fall."

His explanation to French oil newsletter Petrostrategies was technical, based on the idea that public policy in many countries was to invest in alternative energy sources to compete with crude.

These government-backed alternative sources such as biofuels -- but also alternative oil sources in Canada's tar sands, for example -- can only compete with crude if the price of oil stays above 60-70 dollars a barrel.

"If you take all the subsidies that go into producing a barrel of biofuels, I doubt that anybody can make money in that business with a price less than 60 or 70 dollars," Nuaimi was quoted by AFP as saying.

"And therefore a line has been drawn below which the price cannot fall."

He said the price, which is high by historical standards, resulted from the policy objectives of having diversified energy sources.

"There is a cost to that. That cost determines the level at which the price of energy is going to be," he said.

Oil prices are currently trading at an unprecedented level of more than 100 dollars a barrel, heaping pressure on Saudi Arabia and other members of oil cartel OPEC to increase production at their meeting this week. (*) END

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