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'OPEC attempting to stablise oil prices'

business Updated: Jan 14, 2009 20:28 IST

AFP
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Saudi Arabian Oil Minister Ali Ibrahim al-Nuaimi said Wednesday the Organisation of Oil Exporting Countries (OPEC), which has drastically cut production, was trying to stabilise oil prices.

"OPEC is trying to bring stability to the market and lessen volatility," the Press Trust of India quoted the visiting Saudi minister as saying in New Delhi.

Oil prices climbed on Wednesday in reaction to OPEC comments that the cartel was prepared for "further measures" to shore up the market.

The oil minister, however, said OPEC could play only a limited role to calm the prices.

"Price is determined by market (and) OPEC does not determine the price. OPEC is attempting to lessen vitality in market and bring stability and make prices more predictable," he said.

Later, speaking at a seminar, al-Nuaimi also said the "cyclical nature of the oil market is not completely avoidable.

"But we can work together to meet the challenges and extremes."

Saudi Arabia aimed to stabilise the oil market by balancing "supply and demand through the existence of reasonable spare production capacity, over both the short and long term," al-Nuaimi said.

"Stability means oil prices maintained at a level that encourages investment, helping create a climate conducive for the development of all viable energy sources," he said.

Since September, OPEC has cut a total of 4.2 million barrels per day from its production to modify the fall in crude oil prices, which have plummeted by about 100 dollars barrel since their record high of $147.50 in July.