Oil at $100 not our fault: OPEC

Fredrik Dahl
Reuters
Thursday, January 3, 2008

OPEC officials lined up to say the exporter group could do little to tame oil prices that hit $100 a barrel for the first time on Wednesday and world markets had enough crude oil.

The comments underline the view of the producer group that factors other than supply are driving oil's record run. Officials said there was no plan for an emergency OPEC meeting before a scheduled February 1 gathering.

"The problem is not shortage of supply," Hojjatollah Ghanimifard, international affairs director at the National Iranian Oil Company, told Reuters on Thursday. Iran is OPEC's second-largest producer after Saudi Arabia.

"I think the main problem is outside the oil market. Too much liquidity is available," Ghanimifard said. "A big part of it is in the paper market of crude oil."

Oil in New York hit $100 a barrel on Wednesday, the first trading day of the year, and analysts said the price could make further gains. Crude rallied almost 58 percent last year and is up from below $20 in early 2002.

OPEC, source of more than a third of the world's oil, decided to keep oil output steady at a December 5 meeting, rebuffing calls from consumer countries for more supply to rein in prices then trading around $90.

The Organization of the Petroleum Exporting Countries cannot tame the price rise because it is not a result of supply problems, Qatar's oil minister told Reuters on Wednesday.

"I don't think OPEC can do anything," Qatar's Abdullah al-Attiyah said. "If this was related to supply then we could move."

Full article here.