Five years after Norway joined OPEC output cuts to head off an oil price collapse, the world's third biggest exporter is backing OPEC's view that near-$60 a barrel oil is reasonable and no barrier to economic growth.

"It is the market that determines the price and I think it is at a reasonable level," Norwegian Oil Minister Odd Roger Enoksen told reporters during a trip to New Delhi.

The comment could have been made by Saudi Oil Minister Ali Al-Naimi or any other OPEC minister, impatient with parrying accusations OPEC is holding oil consumers to ransom.

It was unexpected from Norway, an OECD member that normally treads a fine line between producer and consumer interests. Oil had tumbled below $17 when Norway, Russia, Mexico, Oman and Angola joined with OPEC to reduce supplies in late 2001.

Analysts say the remark is evidence of the gulf between producing and consuming nations over what constitutes a fair price for oil, the fuel of the world economy.

"(Norway's oil minister) is stating a view in favour of free market principles, not cartel behaviour," said Deborah White, senior economist at SGCIB in Paris.

Producers argue prices have to be sufficiently high to make investment in new oilfields worthwhile. They point out that as the planet's reserves dwindle they are having to drill in ever deeper waters and more inaccessible locations.

But as oil rallied from below $17 in 2001 to a $78 peak last July, consumer nations increasingly feared for their economies.

When OPEC floated plans last month to cut output in response to a $20 price drop and market oversupply, Sam Bodman, energy secretary of top consumer the United States, expressed dismay.

Claude Mandil, the head of the International Energy Agency, recently described $60 oil as very excessive.

White said those blaming OPEC or oil firms for the run-up in oil prices were misguided. What fired the rally in oil, copper, zinc and other commodities was booming demand, she added.

"With every ratchet up in the price we had squawking. The IEA, the G8 and the European Union thought it was OPEC's fault but they were missing the point," she said.

"It was not OPEC forcing up prices, it was the strength of the global economy. When you have a global economy that almost has the strength of Goliath you should not worry that oil will slow Goliath down."

ECONOMIC IMPACT

Mike Wittner, global head of energy market research at Calyon Investment Bank, said the impact of high oil prices on economic growth tended to be oblique.

The world's biggest economy the United States grew at its slowest pace in three years in the third quarter, 1.6 percent, in part because of a slumping housing sector.

The main question is not 'have oil prices impacted economic growth?'. They have impacted core inflation and in reaction to that central bankers have increased interest rates," he said.

"When interest rates are raised it can take 9-12 months for that to trickle through and have an impact on the rate of GDP growth. Energy prices on their own would have a long time lag."

The International Energy Agency, adviser to 26 industrialised nations, concedes the world economy has proved pretty resilient. But it says growth could have been stronger.

"Over the past couple of years we have had relatively strong underlying GDP growth but growth in oil demand has been lower than you would expect," said Lawrence Eagles, head of the IEA's Oil Industry and Markets Division.

"There is not any doubt that the impact of high prices has served to reduce global oil demand growth to below levels where you would have expected."

Richard Batty, global investment strategist at Standard Life Investments, shared that view.

"If oil stays around $60...this will still be a drag on economic growth going forwards," he said.

According to Batty, every $10 rise in the oil price takes between 0.25 percent and 0.75 percent off economic growth, with emerging economies the most affected.

"In the U.S. case each $10 oil price rise that is sustained, could take up to 0.5 percent off GDP growth each year for a couple of years. Given the sustained price rises in recent years we expect the drag on growth to continue for some quarters."