ABU DHABI, 9 May 2004 — United Arab Emirates’ Oil Minister Obeid Al-Nasseri said yesterday that OPEC is not responsible for the current oil hike, blaming ongoing developments in the Middle East.
Speaking to reporters on the sidelines of an environmental conference that opened yesterday in the UAE capital Abu Dhabi, Nasseri said it was still premature to predict the outcome of the extraordinary OPEC meeting slated in Beirut next month. But he said OPEC should address the oil production ceiling and other matters that concern prices.
Nasseri said OPEC is producing about two million barrels per day above the overall ceiling of 23.5 million bpd in a bid to lower the prices currently up to $40 a barrel. Oil prices have hit a fresh 13-year high despite an admission from OPEC that members are still pumping way beyond their quotas. The price is blamed on tight supplies in the US and fears that violence in the Middle East will intensify.
Meanwhile, Qatar’s oil minister acknowledged yesterday that oil prices are too high but attributed the steep rise to geo-political and technical reasons and not to a shortage in supply. “Certainly prices are too high and there’s a $5 political premium. The hike in oil prices has no relation with supply shortages,” Abdullah ibn Hamad Al-Attiyah told reporters in Kuwait City. The minister cited several geo-political reasons for the increase, especially “events in Iraq and other countries.”
“We believe that OPEC always plays a positive role to achieve a balance between supply and demand ... and is keen to have a suitable price for oil,” he said. “We hear cries that prices are too high but we never hear complaints that there are shortages.”
Crude oil hit $40 a barrel in New York Friday for the first time in more than 13 years on fears of terrorist strikes in the Middle East and US gasoline shortages, traders said. The last time prices were so high was in October 1990 after Iraqi troops rolled into Kuwait.
Asked if the Organization of Petroleum Exporting Countries was working under any political pressure, the minister said: “I don’t believe there is political pressure but consumers have the right to feel concerned. “We don’t want OPEC to be blamed for the unstable market. The market is reeling under highly fluctuating psychological and political circumstances.”
