DUBAI (Reuters) – OPEC members saw no need on Sunday to pump more oil in response to last week’s double-digit surge in oil prices to over $139 a barrel that top exporter Saudi Arabia described as unjustified.
More pain was coming for consuming economies hurting from record fuel costs as prices were likely to climb further, officials from the Organization of the Petroleum Exporting Countries (OPEC) said.
Oil soared more than $16 a barrel – over 13 percent – in a two-day rally on Thursday and Friday on weakness in the U.S. dollar and rising tension between Israel and Iran.
“I think there is enough oil in the market,” Shokri Ghanem, head of OPEC member Libya’s National Oil Corporation, told Reuters in a telephone interview.
Top oil exporter Saudi Arabia is the only OPEC member with capacity to boost output quickly and significantly.
But Saudi Oil Minister Ali al-Naimi and his Pakistani counterpart met on Sunday and agreed that the price rise was unjustified and unrelated to market fundamentals, the official Saudi Press Agency reported.
Consuming governments have put pressure on OPEC, supplier of more than a third of the world’s oil, to boost output to ease the effect of high oil prices on their economies. Germany’s government voiced its concern on Sunday about the impact of oil’s rally.
“The increase of the oil prices is becoming a real threat to the worldwide economy,” Germany’s Economy Minister Michael Glos told Reuters.
OPEC blames factors beyond its control, including speculation and international political tension, for the price rises. Those factors could take prices even higher soon, said Iran’s OPEC representative Muhammad Ali Khatibi.
“I forecast that by the end of summer the price of oil will reach $150 a barrel,” Mohammad Ali Khatibi was quoted as saying by Iran’s state broadcaster.
Iran is OPEC’s second largest oil producer and the deepening dispute with the West over Tehran’s nuclear ambitions has contributed to oil’s rally.
Israel’s deputy prime minister said in remarks published last week that an attack on Iran’s nuclear sites looked “unavoidable”, although a senior Israeli defense official said on Sunday the remarks did not reflect state policy.
Investors have bought oil on concern that an escalation in the conflict could disrupt Iran’s exports.
But only a real threat to supply would stir OPEC to meet before its next scheduled gathering on September 9, an insider said on Sunday.
Nobody within OPEC was calling for a meeting before September, Libya’s Ghanem said.
Rising oil prices have defied swelling OPEC supplies to physical markets. Iran said on Sunday it would export over 2.5 million bpd in June as shipments recovered from a 200,000 bpd lull in demand from refiners during April and May. Iran has large volumes of crude sitting in tankers offshore waiting for buyers.
Saudi Arabia has boosted output 300,000 bpd to pump 9.45 million bpd in June, and Oil Minister Ali al-Naimi said last month the kingdom was meeting all demand for its crude.
Iraq expects its exports to hit a five-year high in June.
Still, concern over long-term supplies and declining output from producers outside OPEC have also lifted the oil price. Ghanem said on Sunday that oil was getting more difficult and costly to produce and that global supplies were nearing their peak.
“The easy, cheap oil is over,” he said. “Peak oil is looming.”