Output hike may not cool prices: Opec

Riyadh: Oil prices would probably not fall even if Opec raises production when it meets in Dec-ember, since the market is being supported by factors other than supply, the oil minister of Algeria said on Thursday.

Energy and Mines Minister Chakib Khelil also reiterated that he did not believe a production rise would be necessary at the group's December 5 meeting in Abu Dhabi, although his Nigerian counterpart left the door open for an increase.

Asked whether Opec would raise output when it meets on December 5, Nigerian Oil Minister Odein Ajumogobia said: "We haven't got the agenda yet but it will certainly be among the issues to be discussed at the Abu Dhabi meeting."

Oil ministers have made clear they will not discuss output policy at the heads of state summit now under way in Riyadh, adding that they believe factors beyond Opec's control - such as speculation and geopolitical anxiety - are driving prices.

"If we increase, we are going to have the same phen-omenon that happened before, which means it may not even impact on the price," Khelil said.

Asked what action Opec would likely take in December, Khelil said: "No change, because there is good supply. If there is anything to be done, it will be done to help psychologically the market. There is no need really."

"Supply and demand are in equilibrium."

The group also said it sees a modest downturn in the US economy in the fourth quarter due in part to record high oil prices, but booming growth in China and the Middle East will keep world oil demand strong.

Opec, in its November Monthly Oil Market Report, said "The strong [US] economic performance in the third quarter is not expected to be repeated in the last quarter of the year."

"The US consumer is facing headwinds from falling house prices, restrictions on borrowing and higher energy costs."

Reining in speculators

Opec officials at a summit of the producer group said there was no easy way to crack down on speculators whom they blame for sending oil prices to a record high near $100 a barrel.

Oil's climb to an all-time peak of $98.62 on November 7 has been fuelled by a flow of speculative money into the commodity, according to Opec. Some of that cash was pulled out this week, helping prices fall near $93.

"I don't know how to tackle them," said Qatar's oil minister, Abdullah Al Attiyah, when asked what should be done to rein in speculators. "They are like ghosts, how are you going to fight a ghost?"