(Reuters) - Any dip in oil below $70 a barrel will almost certainly be brief as possible OPEC action and the prospect of future supply limits prevent a sustained slide, industry executives told Reuters Global Energy Summit.
Analysts have cut their price outlooks in response to extreme nervousness across financial markets
In the near term, action from the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, could bolster the market if oil fails to sustain its rally from a low this month of less than $65 a barrel.
Representing OPEC at the Reuters energy summit, Libya's most senior oil official Shokri Ghanem said only the group was monitoring the situation and saw no need for intervention yet.
"We are concerned. We are following it up and we are asking each other to abide by the ceiling for the time being this is what we are doing," Ghanem said.
Oil markets are often skeptical about OPEC's ability to comply with its production quotas, especially as discipline has slipped to only 51 percent of agreed curbs.
But deep price falls could concentrate minds as was the case the end of 2008 and start of 2009.
"If it goes below $70, OPEC will ask their members to comply with the quota," said Jean-Jacques Mosconi, head of strategy at oil major Total.
"When the price was really down, they were very scared and they were very compliant with the quota. It's human. When they see the price climbing up, they say 'we don't have to be close to the quota'."
In the current climate of still tepid demand and sluggish economic recovery, he saw this year's peak of $87.15 as overdone, but deep falls would also be an exaggeration.
"We know the price was not justified at $85. Demand was not strong enough. There is excess capacity of 5 million barrels per day (bpd) in OPEC members. The price has not to be $30-$40, but more than $80 was too much.
"Maybe we're coming back toward a price without speculation of $70."
LONGER TERM BULLISHNESS
Over the longer term, any reduced investment in new projects following the 2008 price slump, and as a result of tightened deepwater regulation following BP's (BP.L) spill in the Gulf of Mexico, could drive oil higher.
Among those closest to investment trends in the oil sector are contractors, such as France's Technip (TECF.PA), which predicted an oil price rally at some point.
"I'm not an economist, but I can tell you what's absolutely sure is that all the delays that have happened, all the delays that could potentially happen in the Gulf of Mexico, we're going to pay one day," said CEO Thierry Pilenko.
"I don't know whether it's in 18 months or in two years, but at some stage, everybody will be screaming for resources."
He said his customers made conservative price assumptions of around $50-$60 a barrel, a level too low to encourage investment in the more difficult prospects, which many in the industry think the world increasingly will need.
Projects to extract oil from tar sands, for instance, only picked up, he said, when the oil price rose to around $75-$80.
The price at which tar sands become most viable coincides with the $70-$80 a barrel range Saudi Arabia has repeatedly said is good for producers and consumers.
Many industry players are inclined to agree and see the oil market finding equilibrium around that level, with Saudi Arabia, sensitive to possible demand destruction, acting to quash any spikes above as well as below.
"It's unlikely if you exclude major political drama that prices are going much above $80-$85. There is capacity in place that can be ramped up," said Saras (SRS.MI) General Manager Dario Scaffardi. "Saudi Arabia does not want the price to go out of control."
(Editing by Amanda Cooper)