Oil price should be US$5-8 below current levels: OPEC chief

10-Jun-05

Oil prices which seemed to have stabilised at levels of US$52 a barrel, spiked up in the last couple of days on the report of a surprise decline in US crude oil inventories. OPEC president is being quoted to have said in Brussels that the price of oil should be 5-8 dollars lower than current levels. He intends to propose a 500,000 bpd hike in OPEC's output ceiling at a meeting next week if prices remain at current high levels. Opec president is quoted to have blamed high oil prices on speculation and said there was no shortage of crude. Opec has been producing at 25-year highs in an effort to control in runaway oil prices, which have surged 25% this year. The higher production has helped push crude inventories in consumer nations higher, though worries have been voiced that the world's oil suppliers will not be able to keep up with rising demand. US crude oil stockpiles have touched near record levels since 1999, but current higher inventories lose their significance over levels recorded 6 years ago due to the growing rate of consumption.