Oil prices won't come down: OPEC president

Oil prices "will not come down," OPEC president Chakib Khelil said Tuesday, assuring that the oil cartel has already done what it can on the matter. "OPEC has already done what OPEC can do and prices will not come down," Khelil told journalists as he arrived for a meeting with EU energy officials in Brussels.

Khelil says oil supply bigger than demand, over-production estimated at 500,000 barrels per day.
ALGIERS - OPEC’s acting president Chakib Khelil on Thursday ruled out an increase in production by the oil exporting group despite pressure on the cartel to help rein in record crude prices.

Khelil, who is Algeria’s energy minister, said OPEC "excludes resorting to an increase in production because at the moment supply is bigger than demand and there is over-production estimated at 500,000 barrels per day."

In comments made to the press, he explained that Iraq had increased its production and Saudi Arabian output had also gone up by 300,000 barrels per day.

The Organization of Petroleum Exporting Countries would hold a planned meeting on September 9 "to proceed with an evaluation of the market and to take decisions likely to assure the stability of the market," he said.

He accepted that OPEC faced pressure to increase production to help soothe the tense market, but he said that "the fundamentals of the market are not influencing prices at the moment.

"The problem is the result of the economic crisis hitting the United States which has led to the depreciation of the dollar, as well as threats to Iran which constitute a source of geopolitical uncertainty."

The fall of the dollar has increased demand for crude from foreign buyers. The commodity is priced in dollars, so when the dollar falls it makes it cheaper for buyers using other currencies.

Khelil also said speculation by investors had played a part in higher prices.

He backed a proposed meeting of consumer and producing countries in Saudi Arabia on June 22.

Oil prices fell sharply on Thursday as the dollar strengthened on another highly volatile day on world oil markets.

New York’s main oil futures contract, light sweet crude for July delivery, slumped 4.00 dollars to 132.42 dollars per barrel.

The contract had surged by five dollars the previous day in response to a US government report that showed American crude reserves dipped for a fourth week running.

Brent North Sea crude for July delivery sank 2.72 dollars to 132.30 dollars.