Oil should not rise too fast - official

ECONOMIC GROWTH: OPEC secretary general says oil price should not rise too fast, but does not see $80 a barrel as putting a brake on global economic growth. (Getty Images)

Oil prices should not rise too quickly and hurt the world economy, but a price of $80 a barrel would not put a brake on growth, OPEC's Secretary General told Reuters on Monday.

The price of oil hit a 2009 high near $73 a barrel last week, up from below $33 in mid-December, and politicians in consumer countries have started to express concern that the rally could threaten their economies.

"Of course we do not want to see oil prices rising too rapidly and certainly not to harm growth in the global economy," OPEC's Abdullah al-Badri said in an email response to questions. "We need a stable oil price."

"Yes, I am concerned that high oil prices will affect the economy but even at $80 a barrel, I am confident that this will not be the case."

French Economy Minister Christine Lagarde said at the weekend G8 ministers wanted measures to curb volatility in oil markets, which put at risk growing signs that their economies were heading towards recovery.

Badri, while cautiously optimistic about the outlook for world oil demand, said oil prices remained largely driven by sentiment rather than supply and demand fundamentals.

"We are now seeing some positive improvements related to the global economy and this is also creating a more optimistic outlook for world oil demand."

"The market still needs to see a sustained change in fundamentals in which it is not primarily driven by bullish sentiment, which is certainly the case today." (Reuters)

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