OPEC officials meet on oil supply

Ali al-Naimi, Saudi Arabia’s oil minister, said that he was satisfied with the current price of oil [AFP]

Ministers from the Organisation of Petroleum Exporting Countries (OPEC) have said that there is no need to supply the world with more crude oil, even as prices traded close to a two-year high and increased concern that prices above $100 per barrel would increase inflation levels in developing economies.

OPEC ministers met in Cairo, the Egyptian capital, where they discussed oil production and prices, but no formal decision on output is expected take place.

Ali al-Naimi, Saudi Arabia’s oil minister, said on Friday that 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 in June.

US 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.

Mohammed Bin Dhaen Al Hamli, the UAE oil minister, said that he wants OPEC to comply better with output cuts the group agreed to in late 2008, and he believes that current prices did not reflect fundamentals.

Oil’s more than 30 per cent climb from this year’s low in May has revived concerns that prices could once again damage economic growth in fuel-importing countries.

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.

And in India, the government is expected to decide next week whether to increase state-set fuel prices to cushion domestic oil retailers.

But Abdullah al-Attiyah, Qatar’s oil minister, echoed the consensus at Saturday’s  meeting, saying that supply was not the problem, and that many oil producers have blamed high prices not on a lack of supply but on the influence of oil speculators.