<div>Nearly a year after oil markets entered a deep downward spiral, unmoored from the $100-a-barrel mark that had anchored them for years, some OPEC members are publicly talking for the first time about a new "fair" price for their crude.</div><div> </div><div>Oil ministers from Iraq, Venezuela and Angola said in Vienna this week that a price of $75 or $80 a barrel - barely $10 above the going rate - could be just fine. Iraq's Adel Abdel Mahdi said it would be "equitable".</div><div> </div><div>Privately, one Gulf OPEC delegate also told Reuters he reckons crude may be trading around this level next year, once markets rebalance.</div><div> </div><div>It remains to be seen whether this new range becomes a common refrain for the group, which has effectively given up efforts to maintain prices in order to defend its share of the world market.</div><div> </div><div>Importantly, Saudi Arabia - which for years had pointed to $100 a barrel as a "fair price for producers and consumers" - has given no indication that it subscribes to this view.</div><div> </div><div>Yet simply by uttering the numbers, OPEC ministers are helping to quench a craving among traders, investors and energy executives for clarity on medium-term oil prices, an indication as to when months of uncertainty and volatility may end.</div><div> </div><div>To be sure, there's no indication that the Organization of the Petroleum Exporting Countries as a whole feels any urgency to push prices back up into the $70s - in fact quite the opposite. The group is expected on Friday to agree to maintain its current production for months to come.</div><div> </div><div>Even if Saudi Arabia and its Gulf allies begin talking seriously about shoring up the market, finding the right balance will be tricky: Iran needs more than $100 a barrel to balance its budget; yet too high a price threatens to revive competition from the U.S. shale industry, where urgent efforts to cut costs have already helped temper some of the downturn.</div><div> </div><div>“If oil prices recover, shale production will go higher again. So we need to get used to a totally different dynamic," Eni Chief Executive Claudio Descalzi said on Wednesday.</div><div> </div><div><strong>Price Bands And Fairness</strong></div><div>As a policy, OPEC has not openly targeted specific oil prices for over a decade, ever since it abandoned a $22 to $28 price 'band' instituted after the late-1990s crash.</div><div> </div><div>As the market entered a years-long bull run, members' expectations rose gradually and informally, with OPEC stressing the need to meet demand rather than pump up prices.</div><div> </div><div>In the wake of the 2008 financial crisis, with OPEC cutting output desperately to shore up prices that had fallen from nearly $150 a barrel to less than $40, Saudi King Abdullah surprised traders by saying bluntly that $75 was a "fair price".</div><div> </div><div>Over the following year or two, that view shifted up to around $100, a mark that OPEC managed to maintain effortlessly for most of the previous five years.</div><div> </div><div>As recently as May 2014, Saudi Oil Minister Ali al-Naimi was repeating that mantra: "One-hundred dollars is a fair price for everybody - consumers, producers, oil companies," he said.</div><div> </div><div>Since the group's decision last November to maintain production despite a growing global glut, the role of swing supplier has fallen to hundreds of shale drillers who are quickly curbing activity to halt the rapid rise in U.S. production - a messy, volatile process that has contributed to heightened uncertainty on the outlook.</div><div> </div><div>There's a gap of nearly $40 a barrel between the highest and lowest Brent forecasts for next year, with an average of around $70, according to a Reuters poll this week.</div><div> </div><div>“Uncertainty is the rule of the game in this industry. It is a permanent coup d’état," said French oil company Total's Chief Executive Patrick Pouyanne.</div><div> </div><div><strong>New Goal Or Wishful Thinking</strong></div><div>Iraqi oil minister Abdel Mahdi told an OPEC seminar that an "equitable price" would be $75 to $80. His Venezuelan counterpart Asdrubal Chavez, asked the same question, said: "We share the same opinion of the minister of Iraq." The oil minister of Iran declined to answer.</div><div> </div><div>Chavez's view was particularly surprising as Venezuela is one of OPEC's biggest price hawks, and has been working feverishly if fruitlessly to get big non-OPEC producers such as Russia and the powerful Gulf OPEC members to talk about across-the-board production cuts and revive prices.</div><div> </div><div>Just three weeks ago, President Nicolas Maduro said it was "in the best interests of Venezuela and OPEC to see the price stabilise at $100 in the medium term" - although months earlier he cautioned his citizens that prices would never return there.</div><div> </div><div>One executive from a major Western oil company, also in Vienna, said the signals were likely hopeful visions rather than statements of intent: "It's their way of saying we like these prices. Consumers would want lower prices."</div><div> </div><div>Indeed, India's minister of petroleum, Dharmendra Pradhan, said at the same seminar that around $65 - plus or minus $2 or $3 a barrel - would be acceptable.</div><div> </div><div>Paul Horsnell, global head of commodities research at Standard Chartered and a veteran OPEC watcher, said he was surprised to hear the "fair price" refrain returning, although he cautioned that $80 was too low to be a long-term norm.</div><div> </div><div>"If non-OPEC outside North America hasn't managed to grow for five years with prices above $110, it's not going to grow at $80," he said.</div><div> </div><div>Others said it may not be too far off the mark.</div><div> </div><div>Ann-Louise Hittle, a senior oil analyst at Wood Mackenzie, expects prices to average $70 a barrel next year, low enough to maintain demand growth and also prevent U.S. production from resuming its breakneck growth. But she cautioned against reading too much into the comments.</div><div> </div><div>"It's significant that somebody is even talking about price after the last meeting, but until the Saudis say it, it's not something you want to put a lot of credence into."</div><div> </div><div>(Reuters)</div>
