Qatar's oil minister said Tuesday that crude's recent rally is driven mainly by speculation, not a shortage of supply, and dismissed the likelihood that OPEC would hold a special meeting to re-evaluate current production levels.
Crude prices have shot up 24 percent since early February, building on growing investor confidence that the world's nascent economic recovery will help fuel demand for oil. On Tuesday, the U.S. benchmark crude futures contract for May delivery was hovering around $86 per barrel in electronic trading on the New York Mercantile Exchange, near its 18-month record high.
"Nothing about this (crude's recent price increase) is linked to a shortage of supply," Abdullah bin Hamad al-Attiyah said. "We haven't heard from any producer that they want an increase in production."
Al-Attiyah, whose country is one of 12 member states of the Organization of the Petroleum Exporting Countries, said that speculation remained a key force behind the price rally—an impetus that often eclipsed supply and demand fundamentals.
He said there was "no need" for the producer bloc to hold a special meeting for now. OPEC's next meeting is scheduled for October.
Speaking at the official opening of a new refinery in the natural gas-rich nations, al-Attiyah said sharp swings in the price of crude from one day to the next "point to a lack of confidence about the global economy."
"Many investors lack confidence in stocks or real estate, and so they turn to oil or gold," he said.
The group, which supplies about 35 percent of the world's crude, has held its production targets unchanged for more than a year since enacting a series of cuts aimed at reducing member output by a record 4.2 million barrels per day.
The reductions helped oil prices rebound from a plummet fueled by the global economic crisis, and OPEC members have been cautious about readjusting quotas for fear it would undercut world growth efforts.
As prices climbed, however, compliance by the 11 OPEC members bound by quotas has eroded sharply, falling below the 60 percent mark.
The Qatari oil minister said global crude inventories remain very high.