By Simon Webb
Record prices not the result of supply shortage although they are rising too fast, oil cartel says.
Oil prices are rising "too high too fast" but the market is well supplied, the Opec governor of the UAE said on Thursday.
Ali al-Yabhouni said his country, the world's sixth largest exporter of oil, was willing and prepared to raise production if market fundamentals required.
"Current prices are going too fast too high," Yabhouni told reporters on the sidelines of an energy event in Dubai. "High oil prices are not good for producers or consumers."
Asked if the UAE would raise production in line with Saudi Arabia's output hike, Yabhouni said the UAE was "willing and well prepared" to boost output if there was a supply shortage.
Top oil exporter Saudi Arabia has boosted supply to help meet the world's need for fuel and may further increase output later if needed, a senior Gulf Opec source said on Wednesday.
US crude hit a record above $135 a barrel last week, prompting consumer countries such as the US to renew their plea for more oil from Opec.
But Yabhouni said supply outstripped demand.
"We have to see demand ... if we look at the fundamentals of supply and demand there is more supply than demand," he said. "If you look at fundamentals, we don't have a good explanation or justification for why we see these prices," he said.
Yabhouni said the UAE wanted to see stable prices as volatile markets make it difficult to plan investments in capacity expansion.
"Six months ago the price broke through $100. Prices are still rising but the fundamentals are little changed. Production is steady and stocks are above the five year average. So we're asking the same questions as we did six months ago. Why are prices so high and why are they rising?" (Reuters)For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Oil prices are expected to hit USD 150-200 a barrel. If this happens, the poorer countries and people, will be crippled.