Saudi, Qatar say oil price should support investment

By Nidhi Verma and Mayank Bhardwaj

NEW DELHI (Reuters) - Crude oil's fall in recent months will help support a sagging world economy but current prices do not reflect fundamentals and need to be at a level that encourages investment, two OPEC producers said in New Delhi on Wednesday.

The global financial crisis, the worst since the 1930s, has pushed much of the industrialised world into recession, causing oil demand to slump and crude prices to tumble by more than $100 from its record peak above $147 a barrel last July.

Saudi Oil Minister Ali al-Naimi told delegates at the Petrotech conference oil prices should be stable and more predictable, and added he was especially committed to the needs of growing Asian markets.

Qatar's Oil Minister Abdullah al-Attiyah suggested a target price of $70, which is about 80 percent higher than the current level, to encourage investment, while Angola's deputy oil minister said nobody was happy with the present level of prices.

"Stability means oil prices maintained at a level that encourages investment, helping create a climate conducive for the development of all viable energy sources," Naimi said.

On Tuesday, Naimi said on the sidelines of the conference that the world's top exporter would cut output next month to below its OPEC target and was prepared to go even further to arrest the fall in prices.

Talks of production cuts and cold weather in the United States helped oil rise 3 percent towards $39 a barrel on Wednesday although it later slipped back below $38 after news of worse-than-expected U.S. retail sales figures depressed stock markets and hit the dollar.

"The price of oil ... has declined in recent months by more than 70 percent since reaching their highest level in July -- a drop that will play a major role in aiding economic recovery," Naimi said.