Cairo: Core ministers of the Organisation of Petroleum Exporting Countries (Opec) said on Friday they saw no need to supply the world with more crude as oil prices traded near a two-year high and some consumers said they fear a rally above $100 (Dh367) per barrel would spur inflation.
Opec's most influential oil minister, Saudi Arabia's Ali Al Naimi, said he was still happy with an oil price of $70-$80 per barrel.
US crude closed at over $91 per barrel on Thursday and Brent closed 48 cents down at $93.46 on Friday after hitting $94.74 a barrel, its highest level since October 2008.
Arab Opec ministers are meeting in the Egyptian capital this weekend where they are expected to discuss oil production and prices, but no formal decision on output will take place.
UAE Minister of Energy Mohammad Bin Dha'en Al Hameli said he wanted Opec to comply better with output cuts the group agreed in late 2008, and added the current price did not reflect fundamentals. That chimed with Opec's stance that oil demand remains fragile and speculators are to blame for the rally.
Concerns
Oil's more than 30 per cent climb from this year's low in May has revived concerns that prices could once again damage econ-omic growth in fuel importing countries.
South Korea's finance minister warned on Friday that the fifth-largest buyer of crude oil could face inflationary pressures next year.
In India, the government is expected to decide this week whether to increase state-set fuel prices to cushion domestic oil retailers China, the world's second-biggest energy user, raised gasoline and diesel prices to record levels on Wednesday as it aimed to encourage refiners to boost supplies to meet demand.
The government said it would prohibit transport companies passing the rise on to the population. But higher commodity prices helped raise Chinese consumer inflation to a 28-month high in November.
Still, economists expect the inflationary impact from higher oil prices to be weaker than in the past in emerging economies due to rising consumer demand and booming expansion.
"Once you get around $100, if it is sustained and the US, euro area, UK and Japan continue to look weak in their economic growth profile, then at that point you might see some action [from Opec]," said Ben Westmore, a commodities analyst at National Australia Bank. "But that is many months away and it is contingent on a number of things," he added.
Demand revival
Global oil demand has rebounded after two years of decline, with the International Energy Agency recently estimating the world increased consumption by 3.3 million barrels a day in the third quarter — or 3.8 per cent — to 88.6 million barrels per day.
Stocks still remain comfortable. The US's 340.7 million barrels of crude inventories are well above average for this time of year.
— With inputs from Financial Times
