OPEC sees oil gaining risk premium, supply fine

LONDON (Reuters) - Oil prices have risen because of political tension over Iran and there is no need for OPEC to pump more oil, the exporter group's secretary-general said on Wednesday.

Oil was trading above $64 a barrel on Wednesday, with traders still rattled by a $5 spike overnight on a rumor, quickly dismissed by the United States, that a U.S. naval vessel had clashed with Iran.

"The increase is due to the geopolitical situation. This is a risk premium. I hope the situation will be resolved peacefully very soon," Abdullah al-Badri told Reuters by telephone from OPEC's Vienna headquarters.

"As far as we are concerned, the supply and demand situation is balanced, it's fine. There is plenty of oil in the market."

OPEC, which pumps more than a third of the world's oil, agreed at a March 15 meeting to keep current oil output restraints in place. There is no need for more supply from members at the moment, Badri said.

"No...there is nothing wrong with the fundamentals at this time. Maybe there is a gasoline supply and demand tightness in the United States, that's because of the refinery problems there."

Gasoline prices have jumped ahead of the U.S. summer driving season, when demand rises. A U.S. government report on Wednesday showed inventories fell last week, though not as much as analysts expected.

Hasan Qabazard, head of OPEC's research division, told Reuters that a strike by port workers at the Fos-Lavera oil hub in France was among the reasons prices were rising, not a lack of crude oil.

"This strike in France reduces the ability to export to the States," he said. "The market is well supplied with crude."

The two-week strike threatens to shut half of French refineries by the middle of next week, the head of French fuel industry body UFIP said on Wednesday.

The Organization of the Petroleum Exporting Countries had agreed supply curbs totaling 1.7 million barrels per day, or six percent of supplies, at meetings last year.

OPEC holds its next scheduled meeting in September and Badri said he did not expect the group to gather before then to discuss the market.