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Iran Official: Crude Oil Supply Sufficient

Reuters
Thursday, 3 Jan 2008 | 3:03 AM ET

A senior Iranian oil official said on Thursday there was "enough" supply in the market at this time and blamed the high crude price on excessive liquidity in financial markets.

"The problem is not shortage of supply," Hojjatollah Ghanimifard, international affairs director at the National Iranian Oil Company, told Reuters a day after crude hit a lifetime high of $100 per barrel.

"I think the main problem is outside the oil market. Too much liquidity is available," Ghanimifard said. "A big part of it is in the paper market of crude oil."

He said that figures "right now show we (have) enough" crude supply in the market but added that there was a shortage of refining capacity during the winter season in the northern hemisphere.

Iran is OPEC's number two producer but Ghanimifard declined to "speculate" on what the Organization of the Petroleum Exporting Countries might do at its next scheduled meeting on Feb. 1 in Vienna.

Oil prices eased on Thursday after leaping to $100 the day before, amid a rush of investor demand fuelled by expectations of thinning U.S. stockpiles, the falling dollar and geopolitical risks.

Indonesia's OPEC governor earlier told Reuters the producer group might decide to increase oil output in February, saying it has the capability to increase production by 500,000 barrels per day.

Oil's jump on Wednesday was partly triggered by a fresh wave of violence in Nigeria and Algeria, stoking worries of more supply disruptions from the two OPEC members.

OPEC supplies more than a third of the world's oil.

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