Opec sees oil price boost on euro zone bailout

Opec expects a $1 trillion rescue package to boost oil prices back up above $80 a barrel, but warns of wild price swings as the global economy continues on its path to recovery.

Arab oil ministers at an energy summit in the Qatari capital predicted the deal hammered out by European Union finance ministers, central bankers and the International Monetary Fund would send crude back up, once it takes effect.

The $1 trillion emergency fund is aimed at stabilising world financial markets and preventing the Greek debt crisis from destroying the euro currency.

"I think the market will look positively at this development," Opec Secretary-General Abdullah al-Badri told reporters on the sidelines of the Arab Energy Conference.

"I assume prices would go back to normal, where it was...back up to $80 plus."

US crude oil futures rallied to above $77 a barrel on Monday due to prospects the rescue package will strengthen energy demand.

Global equities markets and the euro also rebounded as news of the rescue package helped calm risk aversion.

"We were expecting that," Algeria's Oil Minister Chakib Khelil said of the emergency fund, adding he saw prices heading back up to $85 a barrel.

"It's already had a small effect on prices, once the impact shows, the price would go back to $80 to $85," he said.

Libya's Shokri Ghanem was more bullish, predicting the rescue plan would push crude as high as $87 a barrel.

Algeria's Khelil added the oil cartel had no plans to meet before its scheduled October meeting. The producer group has kept its oil supply policy unchanged since 2008, when it undertook deep curbs on production.

UAE oil minister Mohammed al-Hamli said on Monday compliance "could be better".

Core Gulf Arab members Saudi, the UAE and Kuwait have been the most disciplined in holding to output restraints.