CAIRO (Reuters) - Core OPEC ministers said on Friday they saw no need to supply the world with more crude as oil prices traded near a two-year high and some consumers said they fear a rally above $100 per barrel would spur inflation.
OPEC’s most influential oil minister, Saudi Arabia’s Ali al-Naimi, said he was still happy with an oil price of $70-80 per barrel and there was no need for an extra OPEC meeting before the next scheduled one June.
U.S. crude closed at over $91 per barrel on Thursday and Brent closed 48 cents down at $93.46 on Friday after hitting $94.74 a barrel, its highest level since October 2008.
Arab OPEC ministers are meeting in the Egyptian capital this weekend where they are expected to discuss oil production and prices, but no formal decision on output will take place.
United Arab Emirates’ oil minister said he wanted OPEC to comply better with output cuts the group agreed in late 2008, and added the current price did not reflect fundamentals. That chimed with OPEC’s stance that oil demand remains fragile and speculators are to blame for the rally.
Speaking in Cairo, only Iraq’s new oil minister said the cartel could meet before June if market conditions changed but then added that if a decision was taken to meet it would not be “about price. It’s about market conditions.”
“OPEC has limited its number of meetings to limit market disturbance,” Abdul Kareem Luaibi told Reuters.
Oil’s more than 30 percent climb from this year’s low in May has revived concerns that prices could once again damage economic growth in fuel importing countries.
South Korea’s finance minister warned on Friday that the fifth-largest buyer of crude oil could face inflationary pressures next year.
In India, the government is expected to decide next week whether to increase state-set fuel prices to cushion domestic oil retailers [ID:nSGE6BM06Q]
China, the world’s second-biggest energy user, raised gasoline and diesel prices to record levels on Wednesday as it aimed to encourage refiners to boost supplies to meet demand.
The government said it would prohibit transport companies passing the rise on to the population. But higher commodity prices helped raise Chinese consumer inflation to a 28-month high in November.
Still, economists expect the inflationary impact from higher oil prices to be weaker than in the past in emerging economies due to rising consumer demand and booming expansion.
“Once you get around $100, if it is sustained and the U.S., Euro area, UK and Japan continue to look weak in their economic growth profile, then at that point you might see some action (from OPEC),” said Ben Westmore, a commodities analyst at National Australia Bank.
“But that is many months away and it is contingent on a number of things,” he added.
Reporting by Sherine El Madany, Amena Bakr, Shaimaa Fayed, Writing by Dmitry Zhdannikov, Editing by