NICOSIA (Reuters) – Speculators have driven oil prices to record highs rather than any supply shortage and OPEC is ready to boost output when the market needs more, OPEC’s secretary-general said in an interview published on Sunday.
A slowing global economy would not impact demand in the short term or lead to a price collapse, OPEC Secretary-General Abdullah al-Badri told Cyprus’s Phileleftheros newspaper.
“There is no shortage in the market… We are ready to supply the market with additional quantities of oil if basic market fundamentals justify such a move,” Badri said. “In my view, the basic reason for which we have been seeing higher prices since last September is because of speculation.”
International political tension and a weak dollar have also contributed to the price rise, Badri said.
The Organization of the Petroleum Exporting Countries, source of more than a third of the world’s oil, would monitor the market closely in the run up to its next meeting on February 1, Badri said.
Oil has been trading above $90 for a month and hit a record high of $100.09 a barrel on Jan 3. OPEC officials have said there is little that they can do to tame $100 oil, despite concern among some members of the economic impact of high energy costs.
“At present there is a weakening in the global economy, but I do not think that the price of oil will collapse,” Badri said. “Nor will this… have a notable impact in the development of demand in the coming months.”
Badri said he expected oil prices to remain volatile in 2008.
At its last meeting in December, OPEC kept oil output unchanged, rebuffing calls from consumer countries for more supply to rein in prices then trading around $90.
Badri is due to visit Cyprus on January 16 as a guest of the Nicosia Chamber of Commerce and Industry.