SINGAPORE (Reuters) – Top Gulf OPEC officials expressed alarm on Wednesday at oil prices threatening to top $100, but reiterated that markets were well supplied and steered clear of saying whether OPEC would raise output next week.
The Organization of the Petroleum Exporting Countries (OPEC) is under mounting pressure from consumer nations to raise production again to stop oil prices from vaulting above $100 a barrel, which would add strain to a vulnerable world economy.
But with a week to go before the group’s December 5 meeting in Abu Dhabi, Saudi Oil Minister Ali al-Naimi, the group’s most influential minister, and OPEC President Mohammed bin Dhaen al-Hamli stuck with familiar refrains about the healthy state of oil markets, saying prices were beyond its control.
“We observe with great concern the recent escalation of oil prices. But we believe that the world market is well supplied and petroleum inventories are comfortable,” Naimi said in a speech at an energy conference in Singapore.
Asked about next week’s meeting Naimi said: “We need to look at the data, at the information, and then we will decide.”
Both Naimi and Hamli said they were not aware of any specific output proposals, dismissing news reports that Gulf ministers were considering an increase of up to 750,000 barrels per day (bpd).
“We have not discussed the agenda, you will know (it) next week,” Hamli said.
The group, which controls more than a third of the world’s oil, added 500,000 bpd to markets from November 1 but traders fear that is too little to keep oil stocks from falling sharply when consumption rises during the northern winter.
Naimi echoed other ministers in blaming the weakening U.S. dollar, speculation and geopolitical jitters for the more than 40 percent rise in oil prices since mid-August, saying that $100 crude was unwarranted on the basis of supply and demand.
“There is no relationship between fundamentals and the price today, there is a mismatch. Anyone who tells you otherwise is wrong,” he said. “We have no control over prices, they are determined by the market”
Oil prices fell sharply on Tuesday on rising expectations of another supply increase in December, dropping below $95 for the first time in five days. U.S. crude was down 42 cents at $94.00 on Wednesday.
Hamli, who is also the oil minister of the United Arab Emirates, said the world economy seemed to be holding up well so far. Some analysts fear that high oil prices, coupled with the U.S. subprime mortgage meltdown, could tip the world’s top consumer into recession.
“We are concerned about rising oil prices, but you see over the last year, the world economy has seen robust growth,” he told told reporters.
Naimi also said that Saudi Arabia, the world’s biggest oil exporter, had spare production capacity of 2.3 million bpd and would add another 500,000 bpd of capacity in December. Hamli said total OPEC spare capacity now stands at around 3 million bpd.
Iran’s oil minister said at the weekend that some OPEC members were advocating an increase in production, although most officials have said publicly they do not believe the market is short of oil.
Qatari Oil Minister Abdullah al-Attiyah said on Tuesday the oil market was “saturated” and he saw no need to lift output.
Indonesia, which has limited influence over policy as its output is shrinking and it is a net importer of fuel, said on Tuesday it would back an OPEC increase of 500,000 bpd. On Wednesday Mines and Energy Minister Purnomo Yusgiantoro said he had not heard any discussion of the size of a possible increase.
“We have not received any indications from our team there,” he told reporters in Jakarta.