The OPEC oil group faced calls for increased output to help dampen rising crude prices on Thursday, but leading members stressed that geopolitical rather than supply concerns were driving the market.
Crude prices leapt to nearly 70 dollars per barrel earlier this week, mainly as a result of tension over the capture of British sailors by Iran. They were trading at about 68 dollars per barrel in London and 64 dollars in New York on Thursday, with traders weighing the end of the British-Iranian stand-off against news of a sharp drop in stocks of gasoline in the United States.
"The high prices of late are due to the geopolitical situation. It has nothing to do with the fundamentals," OPEC President Mohammed al-Hamili, who is also oil minister for the United Arab Emirates, argued on the sidelines of an oil industry conference here.
But Claude Mandil, the head of the International Energy Agency, an energy watchdog for rich countries, said that prices were too high and that world supply was "a bit too low." "The oil supply is in our view a bit too low because we are in a period when stocks should be built and we are not sure that stocks are being built right now," he said.
The 12-member Organisation of Petroleum Exporting Countries, which supplies more than a third of world oil, has cut its production twice in the last six months. Qatari Energy Minister Abdullah bin Hamad al-Attiyah echoed Hamili's comments by stressing that supply and demand were in balance and that political and security tensions were to blame for high prices. "This price is not related to demand and supply at all.
It is only related to geopolitics," he said. Attiyah said he did not expect OPEC to increase its production before the cartel's next scheduled meeting in September. "I don't think so. There is no need," he said.
The IEA was set up during the 1973-1974 oil crisis to represent rich countries' energy concerns, partly as a counterweight to the OPEC group. Mandil's comments did not refer to the cartel in name, but he repeated that the IEA believed that "it would be better to have a little more oil" from producers in general. Mandil also said on Thursday that he was "not so concerned" about suggestions that leading gas producers planned to club together to form an OPEC-style cartel for gas.
The prospect has raised fears in consuming countries and the issue is expected to figure at a meeting of possible cartel members at the Gas Exporting Countries Forum in Qatar on Monday. "I don't see how it could be possible to transpose to the gas market the mechanism that OPEC has achieved in the oil market, so I am not very concerned," Mandil said.
Algeria, Iran, Russia, Qatar and Venezeula are to meet in the Qatari capital on Monday. Russian newspaper Kommersant, citing Arab diplomatic sources, reported recently that the countries had been working towards announcing the creation of a gas cartel.
Qatari Energy Minister Attiyah, while declined to comment on the report, said: "We have to wait to see what the others are thinking." Mandil and the OPEC ministers were attending an international oil conference in Paris.
SOURCE : THE TIMES OF INDIA
Crude prices leapt to nearly 70 dollars per barrel earlier this week, mainly as a result of tension over the capture of British sailors by Iran. They were trading at about 68 dollars per barrel in London and 64 dollars in New York on Thursday, with traders weighing the end of the British-Iranian stand-off against news of a sharp drop in stocks of gasoline in the United States.
"The high prices of late are due to the geopolitical situation. It has nothing to do with the fundamentals," OPEC President Mohammed al-Hamili, who is also oil minister for the United Arab Emirates, argued on the sidelines of an oil industry conference here.
But Claude Mandil, the head of the International Energy Agency, an energy watchdog for rich countries, said that prices were too high and that world supply was "a bit too low." "The oil supply is in our view a bit too low because we are in a period when stocks should be built and we are not sure that stocks are being built right now," he said.
The 12-member Organisation of Petroleum Exporting Countries, which supplies more than a third of world oil, has cut its production twice in the last six months. Qatari Energy Minister Abdullah bin Hamad al-Attiyah echoed Hamili's comments by stressing that supply and demand were in balance and that political and security tensions were to blame for high prices. "This price is not related to demand and supply at all.
It is only related to geopolitics," he said. Attiyah said he did not expect OPEC to increase its production before the cartel's next scheduled meeting in September. "I don't think so. There is no need," he said.
The IEA was set up during the 1973-1974 oil crisis to represent rich countries' energy concerns, partly as a counterweight to the OPEC group. Mandil's comments did not refer to the cartel in name, but he repeated that the IEA believed that "it would be better to have a little more oil" from producers in general. Mandil also said on Thursday that he was "not so concerned" about suggestions that leading gas producers planned to club together to form an OPEC-style cartel for gas.
The prospect has raised fears in consuming countries and the issue is expected to figure at a meeting of possible cartel members at the Gas Exporting Countries Forum in Qatar on Monday. "I don't see how it could be possible to transpose to the gas market the mechanism that OPEC has achieved in the oil market, so I am not very concerned," Mandil said.
Algeria, Iran, Russia, Qatar and Venezeula are to meet in the Qatari capital on Monday. Russian newspaper Kommersant, citing Arab diplomatic sources, reported recently that the countries had been working towards announcing the creation of a gas cartel.
Qatari Energy Minister Attiyah, while declined to comment on the report, said: "We have to wait to see what the others are thinking." Mandil and the OPEC ministers were attending an international oil conference in Paris.
SOURCE : THE TIMES OF INDIA
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