New IMF boss Rodrigo Rato said on Tuesday surging oil prices, which hit a fresh 1990 closing high minutes after he spoke, are disrupting financial markets.
Rato, the incoming managing director of the International Monetary Fund, welcomed a call by Saudi Arabia for Opec to boost output by 1,5-million barrels per day.
”The evolution of prices of energy have been very abrupt in the recent weeks. That is probably producing disruptions in the market and it is something that we are following very closely,” Rato told his first formal news conference here as the IMF chief.
Oil prices had been under upward pressure for the past two years, exceeding the $22-28 medium-term price target of the Organisation of Petroleum Exporting Countries (Opec), said the former Spanish economy minister.
”The Fund considers that the announcement yesterday by Saudi Arabia to propose to the rest of the Opec producing countires an increase in production is a good step to satisfy what is clearly strong demand.”
Saudi Arabia’s oil minister Ali al-Naimi on Monday called for an increase in Opec’s production quota of not less than 1,5 barrels per day — comments which initially forced prices down.
Minutes after Rato spoke, however, crude oil closed above $40 a barrel in New York for the first time since October 1990, at $40,06 for the June futures contract.
Despite rising energy prices, Rato said US inflation appeared tame and he believed interest rates would rise only gradually as monetary policy returned to a more neutral stance. – Sapa-AFP