The global economy can withstand an oil price of $100 a barrel, Kuwait's oil minister said Saturday as other exporters indicated that OPEC may decide against increasing output through 2011 as the market appears well supplied.
Analysts have said that oil producing countries are likely to raise output after crude rallied more than 30 per cent from a low in May because they fear high prices could damage economic growth in fuel importing countries.
European benchmark ICE Brent crude closed at $93.46 on Friday after hitting $94.74 a barrel, its highest level since October 2008.
Arab oil exporters meeting in Cairo this weekend said they saw no need to supply more crude as stocks were high and prices had been inflated temporarily by cold weather in Europe.
Asked by Reuters if the world economy could stand a $100 oil price, Kuwaiti Minister of Oil Sheikh Ahmad Al-Abdullah Al-Sabah said: "Yes it can."
Iraq's new oil minister and the head of Libya's National Oil Corporation both told Reuters that $100 was a fair price, while Qatar's minister, Abdullah Al-Attiyah, said he did not expect OPEC to increase production in 2011.
"I do not expect an OPEC meeting before June because oil prices are stable," he said.
Some delegates even called for exporters to comply better with agreed production limits. OPEC members' compliance with promised cutbacks reached 56 per cent in November, according to Reuters estimates.
When asked if output could be raised, Kuwait's Sheikh Ahmad said: "No. More compliance, more compliance".
Market "Well supplied"
The Cairo meeting of the Organization of Arab Exporting Countries (OAPEC) brought together Arab members of OPEC, including top exporter Saudi Arabia, which has traditionally been viewed as a price moderator, as well as non-OPEC countries Tunisia, Egypt, Syria and Bahrain.
OPEC cut output drastically after the global financial crisis struck in 2008, to prop up collapsing oil prices.
As demand has risen steeply in 2010, and is expected to rise further in 2011, the market is watching closely whether OPEC can release at least some of its spare capacity to prevent prices from soaring to around $150 per barrel as they did before the crisis struck in summer 2008.
OPEC's most influential oil minister, Saudi Arabia's Ali Al-Naimi, said Friday he was still happy with an oil price of $70-80 a barrel and there was no need for an extra OPEC meeting before the next scheduled one in June.
Others in the group have been pressing for a higher price, arguing that quantitive easing and a weakened US dollar that spurred gains across financial markets mean oil price strength is partly nominal.
Egyptian Oil Minister Sameh Fahmy said the current increase in oil prices was the result of higher demand on heating fuel because of the cold weather in Europe.