OPEC President Edmund Daukoru says that oil prices are unlikely to fall much below $70 a barrel during the rest of this year despite the oil cartel having enough spare capacity to keep the market well supplied with crude.
Daukoru, who is also Nigeria's oil minister, told Dow Jones Newswires in an interview this weekend that the international oil market was overreacting by keeping crude prices close to a record level.
Ongoing hostilities between Israeli forces and Hezbollah militia in Lebanon, the start of the hurricane season in the U.S. and refining constraints were among factors supporting high prices, he said. But on the other hand, the U.S. economy was showing signs of softening and the threat of inflation meant the Federal Reserve could act by raising interest rates again, hitting consumer spending and possibly demand, he said.
"If I put all those factors together ... I don't see prices falling much below $70 (a barrel), to be honest with you, until the end of this year," Daukoru said.
The Organization of Petroleum Exporting Countries had the headroom to produce more than 2.5 million b/d of additional crude even though some member countries were currently producing at full capacity, he said.
Judging by what OPEC could place on the market at any given time, Daukoru said the oil cartel was in a comfortable position.
"OPEC production capacity is sufficient to keep the market well supplied," Daukoru said during a three-day visit to China to discuss commercial oil matters with state-run producer China National Offshore Oil Corp.
Despite the violence in the Middle East, he said there were no plans for OPEC to hold a meeting before Sept. 11 when members will gather in Vienna.
"Right now I don't see any emergency that requires an OPEC emergency response or an International Energy Agency emergency response," he said.
In Nigeria, he said around 600,000 b/d of crude output - representing one fifth of total anticipated production by the end of this year - were currently knocked out, largely by ethnic rebel attacks in the Niger Delta region.
This is adding to the pressure on world markets as Nigeria's oil is high-quality light, low sulfur crude referred to as sweet, and is coveted by refiners in the U.S. and Europe because of its high gasoline content and relatively cheap processing costs.
Daukoru, who is also Nigeria's oil minister, told Dow Jones Newswires in an interview this weekend that the international oil market was overreacting by keeping crude prices close to a record level.
Ongoing hostilities between Israeli forces and Hezbollah militia in Lebanon, the start of the hurricane season in the U.S. and refining constraints were among factors supporting high prices, he said. But on the other hand, the U.S. economy was showing signs of softening and the threat of inflation meant the Federal Reserve could act by raising interest rates again, hitting consumer spending and possibly demand, he said.
"If I put all those factors together ... I don't see prices falling much below $70 (a barrel), to be honest with you, until the end of this year," Daukoru said.
The Organization of Petroleum Exporting Countries had the headroom to produce more than 2.5 million b/d of additional crude even though some member countries were currently producing at full capacity, he said.
Judging by what OPEC could place on the market at any given time, Daukoru said the oil cartel was in a comfortable position.
"OPEC production capacity is sufficient to keep the market well supplied," Daukoru said during a three-day visit to China to discuss commercial oil matters with state-run producer China National Offshore Oil Corp.
Despite the violence in the Middle East, he said there were no plans for OPEC to hold a meeting before Sept. 11 when members will gather in Vienna.
"Right now I don't see any emergency that requires an OPEC emergency response or an International Energy Agency emergency response," he said.
In Nigeria, he said around 600,000 b/d of crude output - representing one fifth of total anticipated production by the end of this year - were currently knocked out, largely by ethnic rebel attacks in the Niger Delta region.
This is adding to the pressure on world markets as Nigeria's oil is high-quality light, low sulfur crude referred to as sweet, and is coveted by refiners in the U.S. and Europe because of its high gasoline content and relatively cheap processing costs.
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