Oil and Gas

Iran Says Extra OPEC Oil Unlikely to Curb Prices


Oil prices are not rising because of a lack of crude in the market and so any increase in OPEC output is unlikely to help bring them down, a senior Iranian oil official was quoted as saying on Sunday.

Oil prices hit a record above $90 a barrel on Friday, spurred on by winter supply worries and the weakening U.S. dollar. But adjusted for inflation, it remains below the 1980 peak of $101.70 a barrel, the International Energy Agency says.

"In the current conditions and oil market uncertainties, it is unlikely there will be an increase in OPEC production or that it would have an impact on prices," Javad Yarjani, head of OPEC affairs at Iran's Oil Ministry, told the ministry's news Web site SHANA.

"Price rises are not due to a decrease in oil supply and centres of supply have not been facing problems but rather it is more because of geopolitical issues," he said.

U.S. crude settled down 87 cents at $88.60 a barrel, down from the all-time high of $90.07 hit earlier in the day. London Brent crude lost 81 cents $83.79.

Rising tensions between Turkey and Kurdish rebels in northern Iraq has also pushed up crude, as traders worry about a disruption in flows from Iraq's northern oilfields.

Yarjani also cited this as an issue driving the price rise.

OPEC, source of over a third of the world's oil, agreed in September to boost output by 500,000 bpd from Nov. 1 but the increase has done little to ease consumer worries that energy supplies will be strained this winter.

Ministers from OPEC are due to hold talks on the sidelines of an OPEC heads of state summit in Saudi Arabia on Nov. 17.