Khelil, who is Algeria’s energy minister, said Opec"excludes resorting to an increase in production because at the moment supply is bigger than demand and there is over-production estimated at 500,000 barrels per day."
In comments made to the press, he explained that Iraq had increased its production and Saudi Arabian output had also gone up by 300,000 barrels per day.
The Organisation of Petroleum Exporting Countries would hold a planned meeting on September 9 "to proceed with an evaluation of the market and to take decisions likely to assure the stability of the market," he said.
He accepted that Opec faced pressure to increase production to help soothe the tense market, but he said that "the fundamentals of the market are not influencing prices at the moment.
"The problem is the result of the economic crisis hitting the United States which has led to the depreciation of the dollar, as well as threats to Iran which constitute a source of geopolitical uncertainty." The fall of the dollar has increased demand for crude from foreign buyers. The commodity is priced in dollars, so when the dollar falls it makes it cheaper for buyers using other currencies.
Khelil also said speculation by investors had played a part in higher prices.
He backed a proposed meeting of consumer and producing countries in Saudi Arabia on June 22.
Oil prices fell sharply on Thursday as the dollar strengthened on another highly volatile day on world oil markets. New York’s main oil futures contract, light sweet crude for July delivery, slumped 4.00 dollars to $ 132.42 per barrel.
The contract had surged by five dollars the previous day in response to a US government report that showed American crude reserves dipped for a fourth week running.
Brent North Sea crude for July delivery sank $ 2.72 to $ 132.30.
