OPEC and Saudi Arabia do not have an official price target and are unlikely to adopt one formally.”The Saudis need oil at about $80 and they don’t want prices to go below $70.
“They need cash. They have plans and reforms and now the IPO is delayed. But they don’t want anyone else talking about oil prices now. It’s all because of Trump,” the source said.
An informal target of $70 to $80 raises the prospect of Saudi Arabia making regular tweaks to its output to influence the cost of crude as the market responds to other factors affecting global supply and demand.
One industry source said it may have done precisely that last week.
With Brent heading towards $80 a barrel, Saudi Arabia told the market about an increase in its production last month sooner than it would have usually released such information, the source, who follows Saudi output policy, said.
“The Saudis will probably put a few more dampening signals out, given where prices have gone,” the industry source said.
The aspiration for $70 to $80 is similar to that of other producers within the Organization of the Petroleum Exporting Countries. Algeria, for example, says it sees $75 as fair.”Everybody has been talking about these kinds of numbers,” said an OPEC delegate from outside the Gulf.
Brent crude has fluctuated between $70 and $80 since April 10. After hitting $70.30 on Aug. 15 the oil price has climbed steadily to touch $79.72 on Tuesday.
Earlier this year, Riyadh hoped to see oil prices above $80 and was ready to continue with a supply cut pact until the end of 2018, only to make a U-turn after Trump called on OPEC in April to boost supplies.
