OPEC says no need for more of its oil

VIENNA – Any move by OPEC to raise oil output would merely add to already ample oil stocks in consumer nations, OPEC’s secretary general insisted yesterday as he met with European Union officials concerned at near record prices.

“As we see it now there is no shortage,” OPEC Secretary General Abdullah al-Badri told reporters. “There is a lot of oil on the market, the stocks are very high.”If we add more oil it would not go to the refineries – it would go to the stocks.”Badri was speaking at a regular meeting between OPEC and EU energy officials at OPEC’s Vienna headquarters.Oil has surged above US$70 a barrel from around $50 in January and is within sight of its August, 2006 all-time high above $78.US petrol prices have been the main driver in this year’s rally as refiners struggled to build stocks to meet peak summer demand in the world’s top consumer.US crude inventories are at their highest in more than nine years, however, according to data published on Wednesday.The figures appear to support OPEC’s view that refinery bottlenecks are to blame for high prices.Badri repeated yesterday that OPEC wanted prices sufficiently high to encourage investment in new production but without damaging the economies of consumer nations.”We want to see a reasonable price that is helpful for the producer and consumer alike,” he told reporters.German Economy Minister Michael Glos, representing EU president Germany, said $70 oil was already putting a strain on import-dependent countries.”Apart from a few fluctuations we recently had a stable oil price.However, it is close to the upper limit of what would be tolerable for oil consuming nations, some of which find it much harder to afford it than we Germans do,” he told reporters.He said the EU wanted good relations with OPEC, a predictable trade partner and to avoid price shocks.”I believe OPEC itself has an interest in a well functioning global economy and that there won’t be any situations where too high oil prices dampen the economic upswing,” he added.European Energy Commissioner Andris Piebalgs called on OPEC to steer away from output restrictions.”We are saying: don’t make any restriction and open your production according to how each company and each country feels the market should be supplied.”He conceded there was no shortage of crude oil currently but a joint statement at the end of the talks said the EU had expressed concern supplies may tighten in the coming months.The European Union had an opportunity to explain the bloc’s energy and environmental policy during the talks.In the joint statement, OPEC and the EU “welcomed the growing diversity in the energy mix, including renewables.”The talks addressed biofuels and the many potential impacts of this expanding market.They also looked at the future role of carbon capture and storage in the fight against climate change.OPEC and the European Union agreed during their talks to hold a workshop on the oil-refining sector, including the implications of biofuels, in Brussels end 2007 or early 2008.They promised further discussion on carbon capture and storage cooperation.They also said they would revisit another long-running theme – the impact of financial markets on oil prices and volatility.Nampa-Reuters”There is a lot of oil on the market, the stocks are very high.”If we add more oil it would not go to the refineries – it would go to the stocks.”Badri was speaking at a regular meeting between OPEC and EU energy officials at OPEC’s Vienna headquarters.Oil has surged above US$70 a barrel from around $50 in January and is within sight of its August, 2006 all-time high above $78.US petrol prices have been the main driver in this year’s rally as refiners struggled to build stocks to meet peak summer demand in the world’s top consumer.US crude inventories are at their highest in more than nine years, however, according to data published on Wednesday.The figures appear to support OPEC’s view that refinery bottlenecks are to blame for high prices.Badri repeated yesterday that OPEC wanted prices sufficiently high to encourage investment in new production but without damaging the economies of consumer nations.”We want to see a reasonable price that is helpful for the producer and consumer alike,” he told reporters.German Economy Minister Michael Glos, representing EU president Germany, said $70 oil was already putting a strain on import-dependent countries.”Apart from a few fluctuations we recently had a stable oil price.However, it is close to the upper limit of what would be tolerable for oil consuming nations, some of which find it much harder to afford it than we Germans do,” he told reporters.He said the EU wanted good relations with OPEC, a predictable trade partner and to avoid price shocks.”I believe OPEC itself has an interest in a well functioning global economy and that there won’t be any situations where too high oil prices dampen the economic upswing,” he added.European Energy Commissioner Andris Piebalgs called on OPEC to steer away from output restrictions.”We are saying: don’t make any restriction and open your production according to how each company and each country feels the market should be supplied.”He conceded there was no shortage of crude oil currently but a joint statement at the end of the talks said the EU had expressed concern supplies may tighten in the coming months.The European Union had an opportunity to explain the bloc’s energy and environmental policy during the talks.In the joint statement, OPEC and the EU “welcomed the growing diversity in the energy mix, including renewables.”The talks addressed biofuels and the many potential impacts of this expanding market.They also looked at the future role of carbon capture and storage in the fight against climate change.OPEC and the European Union agreed during their talks to hold a workshop on the oil-refining sector, including the implications of biofuels, in Brussels end 2007 or early 2008.They promised further discussion on carbon capture and storage cooperation.They also said they would revisit another long-running theme – the impact of financial markets on oil prices and volatility.Nampa-Reuters