Fears of a sustained economic downturn have driven the price of oil down
Opec oil producers warned on Tuesday that low oil prices have created a crisis situation that threatens key investment in production, pushing them to seek moderate price increases by cutting output.
Qatar's energy minister, Abdulla bin Hamad Al Attiyah, defended Opec's decision last week to cut production by 1.5 million barrels a day, saying it was necessary amid falling demand due to the global economic turmoil. He added that demand could be frozen for several years.
"You can't say to me 'Don't do it, you're the bad boy,' with no solution, no alternative," he said at an annual oil and money conference in London. "Who will give me guarantees that they will buy?"
Fears of a sustained economic downturn have driven the price of oil down from a record $147.27 a barrel on July 11 to $64 a barrel Tuesday.
United Arab Emirates energy minister Mohammed Bin Dhaen al-Hamli said the current low prices were "very dangerous for the world's economy."
"We need an adequate, reasonable oil price that will continue to stimulate investment," he said. "I think this is really a crisis situation and I think it is very difficult to predict what's going to happen.".
Opec secretary-general Abdullah El-Badri said the organisation was not seeking a high oil price, but a moderate rise. Al Attiyah said a price of between $70 and $80 a barrel was reasonable.
El-Badri added that member countries would think twice about investment in further oil production because they have other priorities including education and health.
Al-Hamli agreed. "I think we are in a price period now where it's extremely difficult ... to finance expensive projects," he said.
Al Attiyah said he did not expect Opec to meet again until December.