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Wed 16 May 2007 02:49 PM

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OPEC: current oil prices aren't 'high'

Cartel's Secretary General suggests that he is comfortable with crude at above $60 a barrel.

OPEC Secretary General Abdullah al-Badri said on Wednesday that he did not believe current oil prices were "high", supporting signs that the producer group is comfortable with maintaining crude at above $60 a barrel.

"I don't think the price at this time is high. We in OPEC and also member countries look into supply and demand and we look at inventories, and the market is not really high," he told reporters in the Indonesian capital.

"You have to keep in mind that now the cost of producing oil is going up, so the price is normal at this time."

The comments come two weeks after Badri said he saw no need for OPEC to increase its production this year, despite repeated cries from consumer nations for more oil.

The International Energy Agency, adviser to 26 industrialised nations, last week reiterated its call for OPEC to pump more oil ahead of summer, when the seasonal surge in U.S. gasoline use causes global oil demand to rise and inventories to decline.

But in its monthly report on Tuesday, OPEC said crude stocks should be more than sufficient to cover summer fuel demand. The report also showed the group's members, who pump over a third of the world's crude, were keeping a lid on output.

Badri, who was speaking after a meeting with Indonesian President Susilo Bambang Yudhoyono, is en route to an experts' meeting with IEA officials later this week.

Oil prices held steady on Wednesday ahead of data expected to show increases in U.S. crude and fuel stocks, with the price of North Sea Brent hovering above $68 after a rally on further supply disruptions in Nigeria.

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