Opec ministers are poised to hold output steady at a meeting on Wednesday, resisting pressure from top consumer the United States to pump more oil to help prop up a fragile economy.
Opec has said triple-digit oil has been driven by factors beyond its control, such as a weak dollar and speculation and not by any lack of fuel.
Washington believes even a token supply increase from the Organisation of the Petroleum Exporting Countries would help to tame a rally that took oil to a record $103,95 on Monday.
But Opec ministers, including those closely allied with the United States, see things differently. Most want to hold output steady and a minority wants a cut.
The group’s most influential minister Ali al-Naimi of Saudi Arabia said in an interview published on Wednesday there was no need to change output because market fundamentals were healthy.
In his first public comments since arriving in Vienna, he said the oil price rally was the result of ”tremendous speculation”.
”This speculation has no link to the stable market fundamentals, which do not need any action,” the al-Hayat newspaper quoted Naimi as saying.
”Why then should any new action be taken if the health of the market that we follow … is sound?”
Opec’s president Chakib Khelil of Algeria also told Reuters early on Wednesday he expected output policy to stay unchanged.
”As far as I know there is nothing new,” he said.
Lower demand, higher stocks?
But Khelil and other ministers have predicted stock levels could build during the second quarter when consumption typically tapers off following the end of winter.
He has also said a seasonal decline in demand could be exaggerated by the impact of economic slowdown.
Concerns about the US economy have already helped to pull oil prices down from the record hit at the start of the week.
Early on Wednesday, US oil futures were trading below $100 a barrel.
Washington says Opec must raise production by a modest 300 000 barrels per day (bpd) to 500 000 bpd to contain any economic damage.
”I think it’s a mistake to have your biggest customer’s economy to slow down … as a result of high energy prices,” United States President George Bush said on Tuesday.
Opec numbers among its members staunch US allies, such as Saudi Arabia, Kuwait and Qatar, but also Iran and Venezuela, which are hardened foes of Washington.
”Bush is wrong. Always,” said Venezuelan Oil Minister Rafael Ramirez.
The exporter group’s 13 members, who pump more than a third of the world’s oil, could have an opportunity to reassess the market at producer-consumer talks in Rome on April 20 to 22. – Reuters