Riyadh/Vienna - Saudi Arabia made clear ahead of a meeting
of the Organization of Petroleum Exporting Countries (OPEC) this
weekend that while OPEC was seeking to restore balance in the oil
market, the cartel does not share analysts' views that a significant
production increase is needed to curb ever-rising oil prices.
Saudi Oil Minister Ali al-Naimi told a press conference in Riyadh
Tuesday that prices were influenced by factors other than market
supply.
'There are many factors that influence oil prices, one of which is
the dollar. If the dollar is stronger, it will have an impact on oil
prices,' al-Naimi said.
Countering pessimistic views that reserves were insufficient he
stressed 'reserves are sufficient at this stage,' adding that fears
about oil supply played into current market instabilities.
'The kingdom [Saudi Arabia] and OPEC seek to create a stable
market. This is what we are doing. The stronger this unfounded
pessimism becomes, the more unstable the oil market is,' the minister
said.
Al-Naimi rejected views that OPEC's unchanged output in the past
was to blame for current alarmingly high oil prices.
He said no decisions on production quotas were to be made at the
upcoming two-day summit starting Saturday.
'The Riyadh summit will not deal with output and prices. Prices
are discussed in normal OPEC meetings,' al-Naimi said.
The participating oil ministers were expected to hold informal
discussions about the market, analysts said.
OPEC, which controls 40 per cent of the world's oil output, blames
recent price increases on speculation, mainly in options trading
rather than on supply shortages.
Al-Naimi dismissed views that oil demand was higher than current
supplies.
OPEC analysts, who share the view that speculation is responsible
for part of the price hike, believe that a further output increase of
up to 1.5 million barrels per day would be necessary to stop the
current oil price rally.
OPEC increased production by 500,000 barrels per day as of
November 1.
One barrel of OPEC-produced crude cost 88.80 dollars on Monday,
down from a new record high above 90 dollars the previous week.
Prices started to drop slightly as OPEC did not rule out a
decision on increasing production for its next policy meeting
scheduled for December 5 in Abu Dhabi.
This weekend's Riyadh conference is expected to focus on long-term
strategies, long-term maintenance of energy supplies, price
stabilization and environmental issues.
© 2007 dpa - Deutsche Presse-Agentur 
USA
Your Talkback on this Story