Opec head blames speculators

Opec President Chakib Khelil says supply is not a problem afp

Opec President Chakib Khelil again blamed speculators for the steep rise in oil prices on Saturday, saying that supply was not a problem.

"There is no problem of supply, the problem is much more linked to speculation," he told a press conference with visiting French ecology and energy minister Jean-Louis Borloo.

He also said the price of oil was closely linked to the exchange rate of the US dollar, which has fallen steeply against other currencies.

"The consensus is that the crisis is not over and there is going to be a continuing impact on the prices of oil because of speculation," he added. Khelil, who is also the Algerian energy minister, had made similar remarks on Monday in an interview with Spanish national radio.

"If Opec decides to raise production… these hikes will not really lower the price," he said then. He said that the cartel of producer nations would not review the situation again until it meets in Vienna on September 9.

Oil prices are still extremely volatile, closing in New York at 127.35 dollars a barrel on Friday for light sweet crude for July delivery, up 73 cents on the day but well short of earlier in the week, when crude surged beyond $135 on concerns about tightening energy supplies. Khelil also linked the diesel fuel market to the rise in oil prices.

"This crisis originates from the introduction of ethanol onto the market, which contributed to reduced diesel production," said Khelil. Less diesel production in turn increased prices across the board, he said.