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NICOSIA - Opec gave a guarded response on Wednesday to calls from US President George W. Bush for more oil to lower near-record prices, saying supply was enough for now and exporters would pump more if needed.
With two weeks until Opec meets to set policy and oil falling from a record high above US$100 ($131.19) hit earlier this month, officials have continued to blame factors beyond their control for the run-up in prices.
"I'm sure the ministers of the conference will not be hesitant to increase production if fundamentals justify that," Opec Secretary-General Abdullah al-Badri said in the Cypriot capital.
The oil minister for small Gulf producer Qatar said it was already clear there was no need to boost production. "I don't think the market needs more oil," Abdullah al-Attiyah told Reuters.
Opec needs to be cautious ahead of the seasonal drop in consumption in the second quarter and because of the possible effect on oil demand of a US recession, he added.
Opec President Chakib Khelil added his voice on Wednesday, saying that if crude inventories rise during the second quarter, "I don't see why Opec should raise output."
The White House earlier said Bush, wrapping up a Middle East trip on Wednesday, hopes his talks in Saudi Arabia will help encourage Opec to raise production and dampen oil prices.
Saudi Arabia, the world's top oil exporter, vowed on Tuesday to boost output when the market needed more, although Saudi Oil Minister Ali al-Naimi did not say whether Opec would do so at its meeting in Vienna.
"We will raise output when the market justifies it, this is our policy," Naimi told reporters in Riyadh.
Saudi Arabia is Opec's most influential member and the only one among its 13 members able to boost supply significantly at short notice. The group produces more than a third of the world's oil.
Easing pressure on Opec, oil has fallen since it hit US$100 for the first time earlier this month, pressured by concern that a potential recession in the United States will erode demand.
Oil was down US$1.00 at US$90.90 at 1930 GMT.
The International Energy agency, adviser to 27 industrialised countries, has also been urging Opec to open the taps. In a report on Wednesday, it pointed to a further drop in consumer countries' oil inventories.
Total oil stocks in member countries of the Organisation for Economic Co-operation and Development have slipped further below the five-year average, a sign of a tightening market, the agency said in a monthly report.
Opec does not regard fuel stocks as being too lean.
"Are today's high oil prices due to a shortage of crude? They are definitely not," Badri said on Wednesday in a speech to the Nicosia Chamber of Commerce and Industry.
"Other factors are at play such as persistent refinery bottlenecks, ongoing geopolitical problems, a decline in the value of the US dollar, and most importantly, market speculation," he said.
"In Opec we are not really advocating price instablility and extremes. We are not very happy with the oil price. We hope fundamentals will prevail at the end of the day."
Other Opec members including Iran, the group's second-largest producer, said falling prices indicated there was no need to pump more.
"Currently, oil prices in global markets have dropped by US$5 to US$6 and our belief is that there is enough oil in global markets and there is no need to increase ... production," Oil Minister Gholamhossein Nozari was quoted as saying on the state broadcaster's website.
Iran's Opec governor, Hossein Kazempour Ardebili, told a local newspaper an easing of tensions over Tehran's nuclear dispute with the West would ease upward pressure on prices but this would not be enough to lower them sharply.
Opec decided to keep oil output steady at its last meeting, held on December 5, rebuffing calls from consumer countries for more supply to rein in prices then trading around US$90.
- REUTERS
