OPEC says crude supply not to blame for oil price
WARSAW/DOHA (Reuters) - Saudi Arabia and other OPEC members said on Wednesday they are not to blame for near-record oil prices, pointing the finger at a global shortage of refinery capacity and international political tension.
The Organization of the Petroleum Exporting Countries is ready to pump more, but for now sees no need and has rebuffed calls from consumer countries for extra oil to lower prices from $76 a barrel.
Oil has been on an upward march since January when it sank
to about $50. Concerns over shortages of gasoline in top consumer the United States and two rounds of OPEC supply curbs have helped push prices higher.
"OPEC does not find any reason at the moment to increase its production of crude oil," the group's president and United Arab Emirates Energy Minister Mohammed al-Hamli said.
"The member-countries of the organization are ready to pump additional amounts of crude oil into the market if the need arises."
The International Energy Agency, adviser to 26 industrialized countries, has called repeatedly on OPEC to open the taps to avoid a supply crunch later this year.
But OPEC ministers say that boosting output will not help.
"The price today is not at all connected with the fundamentals of the oil industry," said Ali al-Naimi, oil minister of top exporter Saudi Arabia in his first comments on world markets in months.
"There is a good balance between supply and demand. Inventories are in a comfortable position, therefore fundamentals do not support high prices today."
Naimi said the kingdom's buyers are not asking for more oil.
OPEC members point to high crude inventories as evidence that the market is well supplied. U.S. inventories recently hit a nine-year high.
STRAIN ON REFINING
In Doha, Qatari energy minister Abdullah al-Attiyah earlier sounded the same message as his Saudi counterpart.
"OPEC cannot do anything about it," Attiyah said. "The world is facing a shortage of gasoline and diesel, but not crude oil."
Supply concerns due to militant attacks and outages in Nigeria and international political tension over Iran's nuclear ambitions have also bolstered prices.
The IEA on Wednesday cited those factors along with refinery constraints for pushing prices higher.
"It is driven up by supply anxieties. It is driven up by Nigeria, Iran, by a number of things," said IEA Deputy Executive Director William Ramsay. "Plus some fundamentals, by some impediments in the refining sector."
OPEC, which pumps over a third of the world's oil, next meets in September to chart output policy. Some officials have suggested the exporters may have no reason to change tack then.
The group's Secretary-General Abdullah al-Badri reiterated that OPEC is prepared to pump more if needed.
"If the Organization sees any evidence that oil prices are rising because of a shortage of crude, which does not exist at this time, it will not hesitate to act immediately to alleviate any such deficit," Badri said in a statement.
For now, some analysts agree with OPEC that slow refinery operations, especially in the United States, and a rush of speculative fund flows are fuelling oil's rally.
London Brent crude hit an 11-month high at $76.63 a barrel on Tuesday, near the record $78.65 hit last August.
"You know how much speculative money there is in the market? Plenty," said Naimi.
(Additional reporting by Gabriela Baczynska in Warsaw, Henrique Almeida and Julie Scheier in Lisbon)
