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Abu Dhabi: Opec is concerned about the potential impact of the near-record price of oil on the world economy but has seen little sign that growth has been hit by higher energy costs, the group's president said yesterday.
The Organisation of Petroleum Exporting Countries stands ready to pump more oil if needed, but it is not clear whether the group will need to boost output before the end of the year, said Opec President and UAE Energy Minister Mohammad Bin Dha'en Al Hamili.
"We are concerned about the higher price, because we don't want to go through a recession," Al Hamili said in his first formal interview since taking the presidency at the beginning of this year.
There is so far little sign of an impact on expansion, he said. The global economy looks likely to register strong growth again this year, as it did in 2006, despite high oil prices.
In real terms, adjusted for inflation and the weak dollar, the cost of a barrel is no higher than it was three decades ago, he said.
Al Hamili said he had no "magic number" for where he thought the price of oil should be.
Brent crude hit an 11-month high at $78.40 a barrel last week, within sight of the record $78.65 it touched last August.
Asian demand
Oil demand growth from emerging markets such as China and India is strong, but Al Hamili said he did not know if that meant Opec would need to open the taps this year.
"Whether we are going to have to change by the end of the year, I don't know."
Some Opec officials have said the group will have no need to alter output policy in 2007.
Al Hamili said forecasts for a large increase in supply from producers outside of Opec due onstream later this year, which should help meet rising demand.
Opec has faced pressure this year from consuming countries represented by the Paris-based International Energy Agency to increase crude output to dampen high prices.
But Al Hamili said boosting output would do little to ease the price as crude supplies were already sufficient. Global crude stocks are well above the five-year average, and pumping more would just add to the stockpiles, he said.
"If we see there is a need for more oil, we will supply more," he said. "But if we supply more now, it will go straight to stocks."
The Atlantic hurricane season, which caused havoc in the US oil industry two years ago, could add to the rally, he said. "I don't think people understand how strong these factors are. The hurricane season will put more pressure on the price in the biggest consumer market in the world."
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