Oil prices slip ahead of a key OPEC meeting to decide production policy. Despite a huge global oversupply, some delegates are talking of $80 a barrel as a new 'fair' price for crude. David Pollard reports.
Time was when we didn't need oil to get around. That was long ago - and now as OPEC meets for its Vienna summit, the issue is how to balance global demand against a supply glut - and still make a profit. Qatar's oil minister, Mohammed Al-Sada. (SOUNDBITE) (English) QATAR'S OIL MINISTER, MOHAMMED AL-SADA, SAYING: ''The last nine months or so have been particularly challenging for the oil industry. The crude oil prices lost half their value.'' But discussion on whether OPEC will lower its production ceiling leads to a consensus view: 'no they won't.' Prices collapsed after Saudi Arabia and its Gulf allies began promoting market share rather than price last November. But they've perked up since - many see stronger demand ahead. India's diesel use has been rising rapidly - Chinese consumers have been buying two million new cars a month. Even in debt-shaken Europe, fuel consumption is near 30-year highs. While turmoil in the Middle East is seen having little downward impact on prices. As for the 30 million barrels per day ceiling: that's already being exceeded in any case, says ING senior global economist, James Knightley. SOUNDBITE (English) JAMES KNIGHTLEY, SENIOR GLOBAL ECONOMIST AT ING, SAYING: ''I think the economic uncertainty, the financial market volatility and the fact that oil prices have been creeping higher a little bit now suggests that I think they'll probably stand back for now and reassess in a few months' time.'' Others think the demand argument is overdone. China, especially, a concern. Ipek Ozkardeskaya is a market analyst at London Capital Group. SOUNDBITE (English) IPEK OZKARDESKAYA, MARKET ANALYST, LONDON CAPITAL GROUP, SAYING: ''In six months from now, we maybe talk about China, the recovery in China, but we have not seen any good news from the China recovery lately and we are even talking about less than seven percent growth and this is going to be weighing on oil prices as commodity prices.'' Talk's also emerging from Vienna of an oil price at 80 dollars a barrel. Some delegates touting that as a new 'fair price'. Though with Brent Crude currently at around sixty-three dollars, many analysts see that as not only over-optimistic, but also as a long way off.