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Oil prices won't come down: OPEC head

The OPEC president Chakib Khelil says that oil prices will not reduce further, assuring that the oil cartel has already done its best on the issue.

business Updated: Jun 24, 2008 16:14 IST

Oil prices "will not come down," OPEC president Chakib Khelil said on Tuesday, assuring that the oil cartel has already done what it can on the matter.

"OPEC has already done what OPEC can do and prices will not come down," Khelil told journalists as he arrived for a meeting with EU energy officials in Brussels.

Ahead of a summit between producers and consumers in Jeddah last weekend, OPEC heavyweight Saudi Arabia promised on Thursday to lift its oil production by 200,000 barrels per day.

However, Saudi Arabia's increased output, to counter the fears of inflation-hit consumers, exposed divisions within OPEC at the summit with Khelil opposed to a production hike.

In the face of calls from consumer countries for an oil output hike, OPEC secretary general Abdullah al-Badri insisted that supply was currently sufficient.

"There is no shortage, the market is full of oil," he assured, blaming "other factors" for the high price of crude, including refinery problems and hedge funds piling into the market.

EU Energy Commissioner Andris Piebalgs urged OPEC to do away with the grouping's production ceiling in order to provide relief to the market.

"In my opinion, there is no reason to keep ceilings on production," he told journalists.

"If there are no ceilings, markets will adapt much faster," he added. "In this respect we could expect prices to go down, not going up as the tendency has been till now."