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Opec....... No need for high oil prices

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04/21/2006 07:34 PM
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Opec....... No need for high oil prices
[April 20, 2006]

DJ Iran Oil Min: OPEC Is Pumping Crude To Its Capacity -2-

(Comtex Business Via Thomson Dialog NewsEdge)Apr 20, 2006 (Dow Jones Commodities News Select via Comtex) --Vaziri added: "The oil market is saturated at the moment. There is enough oil in the market and there is no shortage. Cutting production at current rates isn't necessary."

Wednesday, Iranian President Mahmoud Ahmadinejad said surging international crude oil prices remain way below what they should be and there is still a lot of room for them to rise further, state-run radio reported.

Vaziri echoed his president's remarks Thursday. "Every seller would be happy with higher oil prices," he said.

However, he conceded that OPEC doesn't favor unusually high prices "because on the one hand they raise production costs and on the other hand they raise inflation rates in the world and cause trouble in the third world."

Elsewhere, a senior OPEC delegate told Dow Jones Newswires that the group is willing to do "whatever it takes" to ease concerns over sky-rocketing oil prices.

Early Thursday, Brent crude futures in London broke above $74 a barrel for the first time, on heightened concerns about shrinking U.S. gasoline stockpiles ahead of the summer driving season in the world's most voracious energy consumer.

U.S. light, sweet crude for delivery in May chalked up a new record front-month contract high of $72.49/bbl.

OPEC ministers are to hold informal policy talks at the Doha forum but the delegate didn't know if it would discuss reinstating a public offer of what it says is its 2 million barrels a day of spare capacity, almost all of that held by Saudi Arabia.

The group offered the volume to the market last year in a bid to quell supply fears stemming from Hurricanes Rita and Katrina, but said later that no customers took up its offer.

The delegate said: "Oil prices are rising because of concerns about Iran and U.S. gasoline supplies. Crude inventories are at eight-year highs so I don't know if making more crude available will make any difference. We've already done that and no-one picked up our offer."

-By Hashem Kalantari, Dow Jones Newswires; +9821 8896 6230; [email protected]

(Spencer Swartz in Doha contributed to this article.)

(END) Dow Jones Newswires