Opec President Chakib Khelil reiterated on Tuesday that there was no shortage of oil available on markets and recent record prices were due to other factors. "Our view from a producers' point of view ... is that as far as fundamentals are concerned I think we have equilibrium between supply and demand," Khelil told reporters.
"In fact right now we have more supply than demand." Factors behind the surge in oil prices included the slump in the value of the US dollar in the wake of the subprime crisis and an influx of funds seeking new areas for investment, he said after a meeting with European Union officials.
Asked about the outlook for oil prices, Khelil said he believed markets were watching for how the dollar performed in July and the situation involving Iran, which is in a stand-off with the United States over its nuclear programme.
Delegates from both the EU and Opec also stressed the need to develop cleaner fossil fuel technologies, in particular carbon capture and storage (CCS) with a follow-up meeting planned for October in Brussels. Opec representatives reiterated that the oil market remains well supplied, with supply exceeding demand and with healthy commercial crude stocks.
"Opec stressed the role of financial markets as well as the declining value of the dollar in driving the current crude oil price and volatility, in particular through increased speculative activity," they said in a joint statement. The two sides agreed to complete a joint study on the impacts of financial markets on oil prices and volatility, and also to study the impacts of biofuels on the oil refining industry.
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