Opec raises price target to $50 a barrel

The Organisation of the Petroleum Exporting Countries unofficially raised its price target on Wednesday to more than $50 a barrel, citing firm demand growth, refining bottlenecks and lack of economic damage from high oil prices.(…) For the new basket to increase above $50 a barrel, this would translate to US and European benchmark crudes of about $57-$58 a barrel or near the record nominal levels reached in April. (…) Saudi Arabia claims it has another 1.5m b/d in production capacity on top of its current output of 9.5m b/d, but it has not sustainably produced more than 10m b/d since the early 1980s. Ali Naimi, Saudi Arabia oil minister, said the kingdom’s spare capacity was largely made up of low quality oils, known as heavy and sour crudes, which many refineries cannot use.

FT