Volatility in global oil prices reflects growing economic uncertainties in the wake of recent turmoil in credit and money markets, Opec said on Friday in a statement prepared for a meeting Saturday of IMF members.
"The recent price volatility reflects the growing economic uncertainties in the wake of the recent financial turbulence, which have further clouded the outlook for the US and world economic growth, and hence demand for oil," the Organisation of Petroleum Exporting Countries said. "At present, our forecasts reflect a continued strong world economy," the group said.
Though US oil prices hit a nominal record $90 a barrel on Friday, they remain below the inflation-adjusted monthly average peak of $101.70 hit in April 1980, a year after the Iranian revolution. Opec also said current higher oil prices were supported by a weaker dollar, lingering geopolitical worries, and speculative activity in the futures market.
It said the economic uncertainties over the global credit crunch have already had an impact on the outlook for world oil demand, adding that demand is expected to increase by 1.3 million barrels a day in 2007. Opec said the upcoming meetings of Opec ministers in November "would provide long-term guidance to enhance Opec's stabilising role in the market".