Opec rejects plea for more crude

The US, the world’s biggest fuel consumer, had said even a token supply increase from Opec, which produces 40 per cent of the world’s oil, would help restrain prices and limit any damage to the world economy.

According to US officials, a modest Opec output increase of 300,000 barrels per day (bpd) to 500,000 bpd could calm prices and help to limit 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,” Bush said.

Dollar blamed

But Opec ministers argued the oil market was pushed higher by a weak dollar, speculation and political strife, and not by a lack of crude.
   
“Yes, the production will not be changed,”  Hussain al-Shahristani, the Iraqi oil minister, said.
   
Chakib Khelil, the Opec president, said he was not going to respond to Bush, but that the US, not Opec, was to blame for high prices.
   
The US slowdown had lowered the value of the dollar, he said, and encouraged speculative flows into oil and other dollar-denominated commodities.
   
“What’s happening in the oil market is due to the mismanagement of the US economy, which is probably affecting the rest of the world,” Khelil said.

Oil dependence

Opec fears that a rise in output would depress oil prices, thus reducing the income of its 13 members, which include the world’s biggest crude producer Saudi Arabia.
  
The price of oil has doubled since the start of 2007, driven in mainly by soaring demand from China and India, emerging economic powers.
  
Another factor has been diplomatic friction or unrest affecting oil producing countries such as Iran and Nigeria.
  
Opec comprises of Algeria, Angola, Ecuador, Indonesia, Iran, Iraq,  Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.