Secretary general of OPEC Abdullah El-Badri said on Monday that oil producers are “concerned” at current high crude oil prices fuelled by sweeping unrest in the Middle East and speculation, but added that markets are adequately supplied.
“The [high] oil price is a concern. We see that there is a US$15-20 premium risk at this time,” El-Badri told reporters.
He was speaking ahead of a roundtable meeting for Asian energy ministers who are expected to discuss the impact of oil prices on the economy.
At the meeting, Gulf oil producers assured consumers that there are sufficient crude supplies to help stem rises in oil prices.
“Certainly, Saudi Arabia’s position in the world oil market is based on its commitment to maintaining spare capacity for the sake of price and market stability,” Saudi Oil Minister Ali Al-Naimi said.
Al-Naimi told the energy ministers’ meeting that the kingdom had spare capacity to increase output by more than 3.5 million barrels a day, which Riyadh can use whenever the need arises.
The previous day he said Saudi Arabia was ready to supply crude as demanded by customers, but he acknowledged that the kingdom’s output fell to 8.29 million barrels a day in March from as high as 9.1 million in February.
Kuwaiti Oil Minister Sheikh Ahmad Abdullah al-Sabah said the situation now is different from in 2008, when oil prices shot to an all-time high of 147 dollars a barrel, because of unused capacity.
“The situation in 2011 is quite different from 2008 due to the availability of surplus capacity in crude oil production and refining capacity as well as the high inventories,” Sheikh Ahmad told the meeting.
But he said the “volatility of prices poses a significant dilemma”, attributing the sharp rise in crude prices to a combination of factors.
“The increase in oil prices is due to the loss of large volumes of sweet [Libyan] crude from the market, expansionary monetary policy, a weak dollar, fear of spread of political unrest to other producers, and resilient demand in Southeast Asia,” the Kuwaiti minister said.