7 May 2007 - 09:35
  • News Code: 103964

OPEC power Saudi Arabia and core Persian Gulf oil producers assured Asian consumers on Wednesday of secure supplies, but indicated they would not pump more crude to ease high prices.

Brent crude, for now more representative of global prices than US oil, has climbed towards $67 a barrel from around $50 in January--stoked by strong demand for US gasoline and low stocks in the world’s top consumer.

’I would like to assure you that the importing Asian nations can depend on West Asia (Middle East) for future security and reliability of oil supply,’ Saudi Oil Minister Ali Al-Naimi told a meeting of Middle East and Asian oil ministers in Riyadh, Reuters said.

Security of supply is a nagging worry for Asia, where economic expansion is leading to growing import dependence on the volatile Middle East. The region, home to 60 percent of the world’s oil reserves, supplies Asia with 55 percent of its oil.

It is equally important for the world’s largest producers, spending massively to boost output in the long term, to be assured of future demand for their oil.

The price of oil was also high on the agenda at informal talks between top exporters such as Saudi Arabia and the United Arab Emirates and major consumers like China and Japan.

Brent crude was trading at $66.80 a barrel at 1124 GMT and US crude at $64.15.

Consumers have called on the Organization of the Petroleum Exporting Countries to help ease prices and prepare for a seasonal third quarter rise in demand by reversing some of the 1.7 million barrels per day cuts it agreed last year.

The head of the International Energy Agency, energy adviser to 26 industrialized nations, said prices were too high and global fuel stockpiles too low. But he stopped short of calling on OPEC to raise output.

’Oil stocks are not growing as much as they should at the moment, so there is not enough oil in the market,’ Claude Mandil, the IEA’s executive director, told reporters in Riyadh. ’It is no secret we think the price is too high.’

A South Korean government statement quoted Saudi’s Naimi as saying there was a ’bubble’ in oil prices. But a Persian Gulf source who attended bilateral talks between the two countries said the price of oil was not discussed.

Seoul also said OPEC President Mohammed Al-Hamli told South Korean energy officials that oil prices were high and could be damaging for both producers and consumers.

But speaking to reporters in Riyadh, Hamli said crude fundamentals were sound and that OPEC had no plans to hold an emergency meeting before its next scheduled conference in September, indicating an output rise was not imminent.

’We do not look at the price. We look at the fundamentals of supply and demand and they are in good shape,’ he told reporters.

OPEC Secretary General Abdullah al-Badri echoed that sentiment, saying in Riyadh there was no need for OPEC to increase production this year.

The Saudi oil minister underscored Asia’s role as a major consumer, saying the region would account for 70 percent of the world’s future oil demand growth. ’The continent of Asia is a huge oil market and given Asia’s expanding role in the global economy, it is also today’s most important oil market,’ said Naimi.


News Code 103964

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