WASHINGTON (AFX) - OPEC said oil producing countries producers are not solely to blame for oil market volatility and challenged oil consuming nations to build more refineries.
OPEC representative Adnan Shihab-Eldin, in a statement to the IMF spring meeting, said OPEC is committed to oil market stability.
'OPEC member countries have been steadily increasing crude production capacity in order to meet expected growth in demand, not only for the current year but for the many years to come,' he said.
G7 finance ministers yesterday warned that rising oil prices threaten the global economy and urged producing countries to boost investment in their production infrastructure.
'Investment is crucial and oil producing countries should provide open and secure investment environments to enable market participants to meet pressing needs,' they said.
But Shihab-Eldin responded: 'The need for appropriate investment is not confined to the upstream sector but also extends along the entire supply chain, particularly in the downstream sector.'
He said oil supplies would remain tight in consuming countries 'especially if the necessary investment in the refining sector is not undertaken in a timely manner'.
He said OPEC members had begun 'ambitious programs of downstream investment...in the hope that consumer countries and the oil industry in general will rise to the challenge and carry their share of investments.'
Shihab-Eldin insisted that a shortage of oil was not the main reason for high prices.
'The market continues to be well supplied, with OPEC member countries' production having averaged 29.6 mln barrels a day in March,' he said.
Meanwhile, two OPEC member countries said the rise in oil prices is the result of Middle East political tension and rampant speculation.
'Prices are not in the hands of OPEC, now the genie is out of the bottle,' Shukri Ghanem, head of the Libya National Oil Company, told reporters on the sidelines of the 10th International Energy Forum in Doha.
'It is a function not only of fundamentals but of this political situation in the Middle East, so there should be a solution for this political question if stability in the market is needed.'
Qatar's oil minister blamed high oil prices on 'horrible' speculation and 'geopolitics' rather than any shortage of supplies.
'This frenzy is fabricated by speculators who are taking advantage of it in the most horrible way,' Abdullah bin Hamad al-Attiya told reporters.
'If you can stop the politicians from making negative statements, I am sure you will see almost 15 dollars disappear from the price.'
Acting OPEC secretary general Mohammed Barkindo stressed that the current situation in the oil market does not only concern OPEC or a handful of countries.
'OPEC is doing everything possible, you can see our numbers, the market is well supplied and the stocks are at 5-6 year highs.' steve.whitehouse@afxnews.com nh/ahe/sw COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited