Algerian Oil Minister Says Crude Prices to Remain High

01-07-2008

Algeria's Oil Minister, Chakib Khelil, and the new OPEC president, has assured no production increases to adjust the high oil prices. He said crude prices are likely to remain high for the next three months.

Crude oil prices, which briefly topped $US100 a barrel for the first time last week, should "stabilise" in the second quarter, Mr Khelil said.

International tensions in Pakistan and Nigeria has contributed to the price increase. And lately the shrinking US crude oil stocks was the bad news for the market. 

The market was "sufficiently supplied, and only the next OPEC conference can decide whether to increase production", he said.

The Organisation of Petroleum Exporting Countries meets in Vienna on February 1.

Mr Khelil said the organization would "study closely forecasts about growth in the world economy".

"If we see that the US economy has moved into a recession, we won't need to increase production because that will reduce demand" for oil, he said.

"If the [possible] recession in the American economy takes shape, OPEC is not going to increase its supply from the moment that is needed only to reduce it later."