'Oil prices can still move upwards'

KUALA LUMPUR - Oil prices can still edge upwards despite a temporary respite due to continued geo-political uncertainties, price speculation and terror threats, a senior Opec official said yesterday.

By (AFP)

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Published: Tue 15 Jun 2004, 10:19 AM

Last updated: Thu 2 Apr 2015, 12:07 PM

"It is not the supply problem. There is the "oil fear'. There is fear over disruption of oil supply. This influences the speculation (of oil prices)," Maizar Rahman, the Vienna-based Indonesian governor for Opec told reporters on the sidelines of an international oil and gas conference here.

"We have increased our production by 2.5 million barrels a day but you can still see the price still going up and down and up again and this is more to (do with the) geo-political situation and futures markert speculation and not supply," he added.

Maizar declined to say how high prices can go. "I cannot say how high it can go."

Oil prices held firm in trading in London yesterday, appearing to shrug of an upsurge of violence in the Middle East. The price of benchmark Brent North Sea crude oil for July delivery fell by four cents to $35.40 in early trading in London.

Earlier, Maizar told the conference that Opec was neither in favour of high prices because that would hurt economic growth nor for low prices.

"If the price is too low, there will be no investors and there will be scarcity in oil. So we ask investors what price level you want - $25 per barrel?," he said. Asked what price band Opec would be happy with, he said, Opec had commissioned a body to study a suitable price range.

"We have formed a long-term strategy team in Opec."

Opec in Beirut on June 3 gave a clear signal of its committment to market stability and to maintain prices at acceptable levels by raising its production ceiling by 2.5 million barrels per day.

Meanwhile, Purnomo Yusgiantoro, Opec president downplayed concerns of supply meeting rising demand.

While Asia had the fastest growing demand, there were enough oil reserves, expecially in Opec to meet rising world demand for decades ahead, he said.

Yusigiantoro's speech was read out by Maizar.

Yusigiantoro, who is also Indonesia's energy and mineral resources minister, warned that the world cannot afford to behave irresponsibly and squander its finite petroleum reserves.

"Opec and non-Opec members are direct custodians of these God given minerals and we have a duty to see that they are exploited in a responsible manner to the benefit of the global community," he said.

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