DUBAI (Reuters) - The weak dollar and the flow of investment money into commodities have pushed oil prices to a fresh record so more pumping from OPEC would have done little to stop the surge, a senior OPEC delegate said on Sunday.
By Simon Webb
DUBAI (Reuters) - The weak dollar and the flow of investment money into commodities have pushed oil prices to a fresh record so more pumping from OPEC would have done little to stop the surge, a senior OPEC delegate said on Sunday.
The Organization of the Petroleum Exporting Countries (OPEC) left its output steady at a meeting earlier this month despite calls from consuming countries for more oil to halt the record rally. The price hit a peak of $111 a barrel on Thursday.
"What can you do?" the senior delegate told Reuters. "Prices are completely ignoring the fundamentals of supply and demand. Even if we had increased (at the meeting), I don't think it would have changed anything. It is financial speculators, the weak dollar and funds driving the price."
!ADVERTISEMENT!OPEC officials have long insisted factors beyond their control are fuelling oil's rally.
The producer group, supplier of more than a third of the world's oil, would not react to speculative oil price movements when market fundamentals were balanced, the OPEC governor of the United Arab Emirates said on Sunday.
"OPEC does not look at prices," UAE OPEC Governor Ali al-Yabhouni told Al Arabiya television. "We look at market fundamentals: Supply, demand and inventories. Predicting prices is difficult because they are not (moving) because of market fundamentals... There is a lot of speculation."
Crude futures have jumped about 15 percent this year in part due to a steep decline in the U.S. dollar, which has helped push up the nominal value of all commodities prices in the currency.
Crude and gasoline inventories in the world's largest energy consumer the United States were rising, an indication that oil market fundamentals were not behind the price rise, the senior delegate said.
U.S. gasoline inventories hit their highest levels for 15 years last week, according to U.S. government data.
In its monthly report on Friday, OPEC said it was pumping more than enough to keep consumers satisfied and a potential U.S. recession could hit demand for its crude.
OPEC had no plans to call an emergency meeting to discuss output policy before the next scheduled meeting in September, Yabhouni said.
Ministers could confer if necessary on the sidelines of producer-consumer talks in Rome in April, the senior delegate said.
"I don't know if they will, but they can meet there and make a decision if they need to," the delegate said.
(Additional reporting by Inal Ersan; Editing by Jason Neely)
