Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah Saturday called on industrialized countries to allow market forces to work to determine oil prices.
"Industrialized countries had always asked us to allow market forces to work. Now, we are demanding the same. (It is a process of) supply and demand," Sheikh Saud told reporters on return from Riyadh, where he attended a global energy forum.
"I believe that having a fixed price for oil is difficult, if not impossible, to achieve," he said. "The current situation is what the oil market demands, and any calls to fix the price are simply wishes." The United States and Europe sounded a warning to oil producers on Saturday that soaring crude prices are damaging the world economy, particularly in developing nations.
US Energy Secretary Bill Richardson, a hardline proponent of OPEC production hikes, led the charge by calling for oil at $20-25 a barrel. He noted the cartel still had the "capacity to lower prices" despite four output increases this year.
"Thirty dollars is excessively high," Richardson told a press conference on the second day of the 7th International Energy Forum in the capital of Saudi Arabia, the world's biggest producer and exporter.
But Sheikh Saud stressed that the international oil market is stable and that OPEC has decided not to increase production until January 17. "The market, as we see it, is stable. We have decided (at OPEC's November 12 meeting) not to hike output until our next January 17 meeting, when we will review the market situation and take suitable decisions.
"We had been careful in our past decisions to make prices at $22-28 a barrel. But we noticed that demand for oil was increasing. Now demand and supply are equal," Sheikh Saud said. However, the Kuwaiti minister warned that oil prices may collapse in the first quarter of next year if stocks increase.
"We must be cautious against a possible process of stockpiling, which may push oil prices down in the first quarter of next year. This is a highly important issue," he said.
Prices have soared above $35 in recent weeks and remain well above $30 on concerns mainly about supplies, worsened by Middle East tensions and fears over Iraqi intentions.—AFP.
©--Agenece France Presse.
© 2000 Mena Report (www.menareport.com)