Biofuels 'will keep oil at minimum $60'

OIL prices will not fall below $60 to $70 a barrel as this is the minimum level at which alternative fuels are economically viable, Saudi oil minister Ali al-Naimi said at the weekend.

Naimi said in an interview with Petrostrategies magazine: "From now, there's a line below which prices won't fall."

He said "the marginal cost of production of alternative fuels, whether that's biofuels or tar sands" had a threshold at those price levels.

"If you take into account all the subsidies involved in the production of a barrel of biofuels, I doubt whether anyone could make money from that with a price lower than $60 or $70," he was reported as saying.