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Oil pumps at work on an oilfield in Los Angeles on May 12, 2009. (MARK RALSTON/AFP/Getty Images)
Oil pumps at work on an oilfield in Los Angeles on May 12, 2009. (MARK RALSTON/AFP/Getty Images)

OPEC says world well supplied, slams IEA Add to ...

World oil markets have more than enough supply and factors including speculation and a weak U.S. dollar have played a part in boosting oil prices, OPEC's secretary general said on Tuesday.

The comments further underline the reluctance of the Organization of the Petroleum Exporting Countries to raise output to lower oil prices. Brent crude is trading around $98 (U.S.) a barrel and near a 27-month high.

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"Oil prices have recently been driven by technical matters such as events in Alaska and the North Sea. Also, the weak dollar and speculation have added to this, pushing oil prices higher, especially Brent," Abdullah al-Badri said in a statement on OPEC's website.

"At the moment, fundamentals show there is more than enough oil on the market."

Oil prices have draw support this month from the shutdown of a major Alaskan pipeline, which has now restarted, and a brief outage at two Norwegian North Sea oilfields.

Mr. Badri also criticized the International Energy Agency, which has been warning of the risks to economic growth of rising oil costs, for a lack of consistency in its view of the oil price.

The head of the IEA, which advises 28 industrialized countries on energy policy, on Monday called the current oil price "alarming" and said OPEC needed to show more flexibility in boosting supplies.

Mr. Badri said the IEA needed to be consistent.

"In 2009, when the oil price was lower, the IEA had advised its members that they needed to increase petroleum taxes."

"So why, today, when they are complaining that oil prices are too high, are they not advising their members to reduce taxes?"

Consumer countries founded the Paris-based IEA in 1973-1974 as a counterweight to OPEC after the Arab oil embargo, which sent prices soaring.

The two sides have a working relationship although their clash this year over the rising oil price and need for extra supplies highlights fundamental differences of approach to the market.

Mr. Badri's statement follows comments from several of OPEC's oil ministers disputing the need for more supply from the group, which pumps more than a third of the world's oil.

OPEC has kept its official output policy unchanged since agreeing to a record cut in its production in December 2008, even though actual production has been climbing since 2009 in response to higher demand and prices.

It routinely blames speculators for rising prices, but some analysts and industry figures - such as the chief executive of French oil group Total - say prices are increasing now because of a recovery in world fuel demand.

Both OPEC and the IEA have raised their demand forecasts this week - the IEA in a report on Tuesday said OPEC would need to pump 400,000 barrels per day (bpd) more than expected this year to balance the market.

Mr. Badri said the group would respond if there was a need for more supply.

"OPEC, as always, is watching the market carefully. We remain committed to oil market stability. If there is a need for us to act, we will do so."

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