29 May 2007 - 13:17
  • News Code: 105861

The world oil markets are well supplied and price volatility is the result of a lack of refining capacity in the United States, not a shortage of crude, Qatari Oil Minister Abdullah al-Attiyah was reported as saying on Monday.

"Price volatility is the result of factors that are unrelated to crude supply, which is available in large quantities, but (because of) a lack of new refineries in the United States over the past 40 years," Qatar"s official news agency, QNA, quoted him as saying.

 

London Brent crude <LCOc1> hit a nine-month high of $71.80 a barrel last week after calls from the International Energy Agency, which represents consumer countries, for OPEC to raise output.

 

It was trading at $70.44 a barrel on Monday.

 

Oil has risen from below $50 in January due to lower supplies from OPEC, violence in Nigeria that has cut output there and a drop in inventories of gasoline in the United States. Various refinery problems in the United States have curbed motor fuel output.

 

The Organization of the Petroleum Exporting Countries, the source of over a third of the world"s oil, agreed last year to curb output by 1.7 million barrels per day, about six percent.

 

OPEC meets again in September to set supply policy. Officials have consistently ruled out meeting before then.

 

Attiyah also said that U.S. warnings to oil-exporting countries over high prices had a negative effect.

 

"When oil prices fell to $7 before 2000 and the oil exporters began to complain, they said it was up to the market, despite the losses the exporters were hit with as a result of the sharp drop in oil prices," he said.

 

 

PIN/Reuters

News Code 105861

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