Doha - An increase in oil output by members of the
Organization of Petroleum Exporting Countries (OPEC) is not needed as
the current supply level exceeds demand and spiralling prices are
mainly caused by speculators, OPEC officials told Deutsche Presse-
Agentur dpa.
'Qatar sees no shortage in oil supplies in the market. If there
was a shortage, we would see people in consumer countries standing in
queues outside fuel stations,' Qatar's Minister of State of Energy
Mohamed Salih al-Sada told dpa.
His view is shared by many OPEC officials, which dampens optimism
about the outcome of a crisis meeting to be held in the Saudi port of
Jeddah on Sunday between oil producers and consumers.
In calling the world's major oil consumers and producers as well
as the chief executives of some of the largest international oil
firms to the Jeddah meeting, Riyadh is recognizing the international
climate disgruntled by prices jumping to unreasonable levels.
But resistance by other OPEC members to any output increase makes
the Saudi task to defuse the international oil crisis harder.
'The market is well supplied. Algeria has even announced that it
has unsold quantities of oil and other producers have not received
any additional demand,' Qatari oil official, Ramzy Salman, told dpa.
Consumption levels are dropping across the world and economic
growth is also slowing down, argues Salman, in support of keeping
production at current levels.
'A time lag between crude oil purchases and distribution, which
can reach between three and four months, is causing a drop in
consumption by individuals and industries,' Salman said.
In the first three months of 2008, trading in oil futures has
become an investment market with about 70 billion dollars being
pumped into it mainly by investment funds, Salman said.
'Speculators are not refinery owners or oil producers but they are
gamblers and risk-takers trading in money that is not theirs,' the
expert said.
'Considering market fundamentals and production costs, the
justified price of oil should be between 60 to 80 dollars per barrel,
no more,' Salman estimated.
Algeria's Minister of Energy and Mines Shakib Khalil told dpa from
Algiers that his country and OPEC would not increase oil output as
current supply levels exceed market demand by 500,000 barrels per
day.
Inventories in consumers countries are sufficient to meet demand,
the Algerian minister said.
Algeria produces 1.45 million barrels per day.
Aside from speculators, skyrocketing prices are also blamed on
geo-political factors, such as instability in production areas in the
Middle East, and a weak dollar caused by the economic crisis in the
US.
An Algerian oil expert, Abdel-Rahman Mabtul, blames high prices on
fast economic growth in China, India and Russia, which has fuelled
domestic consumption and demand there as well the dollar gradually
decreasing against the euro.
The US dollar is the currency used in about 90 per cent of oil
exports and 75 per cent of world trade, the Algerian expert
explained.
The fuel consumption tax in consumer countries is also to blame
for high prices along with the desire by oil multinationals and the
US to keep prices high since low prices would lead to closure of many
oilfields in Texas, Mabtul said.
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