OPEC chief opposes oil output hike

OPEC president Chakib Khelil on Sunday opposed increased production to counter record oil costs saying “the price is disconnected from fundamentals” of supply and demand.

“We believe that the market is in equilibrium. The price is disconnected from fundamentals. It is not a problem of supply,” Khelil, the Algerian oil minister, told a briefing as an international summit on the oil price crisis started in the Saudi city of Jeddah.

Khelil said the 13-nation Organisation of Petroleum Exporting Countries had decided that no special meeting on prices was needed in June and that the market would be studied again at a regular meeting later in the year.

“We will meet in December to take a decision,” Khelil said.

Western consumer nations at the Jeddah summit want increased production to ease supply concerns which they say have forced prices up to almost USD 140 a barrel. OPEC countries say market “speculators” have played a key role in pushing up global prices.

Khelil refused to answer questions about why Saudi Arabia, the top world exporter and OPEC giant, has decided to increase production by another 200,000 barrels a day.

“Why would you have a supply problem when demand is going down,” he said.

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