IMF chief praises Gulf effort on oil price management

RIYADH Sat Oct 6, 2012 1:19pm EDT

1 of 3. International Monetary Fund (IMF) Managing Director Christine Lagarde (C) Bahrain's Finance Minister Ahmed bin Mohammed Al Khalifa, (center L)and Saudi Arabia's Finance Minister Ibrahim al-Assaf, (center R) and other Arab Gulf officials pose before the Gulf Cooperation Council (GCC) Finance Ministers meeting in Riyadh October 6,2012.

Credit: Reuters/Fahad Shadeed

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RIYADH (Reuters) - IMF chief Christine Lagarde praised Gulf oil exporters on Saturday for their help in stabilizing the global economy by managing oil prices, despite complaints by some Western countries that energy costs are still too high.

"It gives me an opportunity to thank the GCC countries for their ... stabilizing role in the global economy because of the good monitoring and good management of oil prices and oil reserves ..." the International Monetary Fund's managing director said.

Lagarde was speaking at a news conference after meeting with senior officials of the Gulf Cooperation Council, which groups six oil-exporting countries - Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman.

Lagarde appeared at pains to enlist the support of wealthy Gulf oil exporters in a year when the Fund has been working to increase its resources, although she said she didn't plan another financing campaign this year.

She also said talks with Greece on its fiscal position had been very good and that the resumption of loan negotiations with Egypt later this month were not subject to preconditions.

Since OPEC ministers last met in June, Brent crude oil prices have surged about 20 percent and have hovered around $112-$117 a barrel since mid-August, despite fragile economic growth in many consuming countries.

Last month, the head of the International Energy Agency (IEA), which represents 28 importing countries said high oil prices were a concern for these nations.

In effort to cap high oil prices, sources told Reuters the United States is considering an emergency oil stocks release. Other members of the IEA, such as France and Great Britain, could also join the move.

The Gulf states have managed to maintain high production levels, making up for lower supplies from Iran because of sanctions, and outages in the North Sea.

Top oil exporter Saudi Arabia's supply remained steady at 9.8 million barrels per day (bpd) in July and August, off multi-decade highs of over 10 million bpd earlier in the year.

The big three Gulf OPEC producers - Saudi Arabia, Kuwait and the United Arab Emirates - collectively increased supply by around 400,000 bpd thanks to a 600,000 bpd jump in Kuwaiti production to 3 million bpd.

GREECE AND EGYPT

Asked about the possibility of another Greek debt restructuring, Lagarde said talks with Athens on its fiscal position were "very good and very productive" but did not elaborate. She did not comment on other areas of the IMF's discussions with Greece, which she said included structural reforms, financing and debt sustainability.

Lagarde said the IMF's visit to Cairo later this month to resume talks on a loan of $4.8 billion or more to Egypt was not subject to preconditions.

The IMF wants Egypt to put in place a program to reduce a budget deficit that has grown to 11 percent of gross domestic product since last year's uprising and the election this year of a new government led by the Muslim Brotherhood's Mohammed Mursi.

"Clearly we need a political environment that is solid enough to have someone to discuss with, and President Mursi and his government are providing that framework for this dialogue," she said.

Earlier this year, GCC members pledged billions of dollars in additional financial resources to the IMF, and they have promised billions more in aid to poorer Arab states since last year's uprisings in the region.

Lagarde praised the "stabilizing role" played by the Gulf countries in supporting "neighboring Arab countries in transition".

Next week she will attend a meeting of finance ministers from the G7 group of major developing nations in Tokyo after an IMF conference with the World Bank.

She said efforts by the fund to increase its resources had resulted in pledges so far this year of $456 billion, but that she had no plans for another fundraising campaign this winter.

(Reporting by Angus McDowall and Marwa Rashad; Writing by Amena Bakr; Editing by Catherine Evans)

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