Iran says oil production hike will not cool prices

Oil prices are likely to stay high and adding more crude to the market will not cool them, Iran said yesterday, striking a typically bullish stance a day after other members of the Organisation of Petroleum Exporting Countries (Opec) said costly fuel could slow global growth. At an oil and gas trade fair in Tehran, Opec Secretary General Abdullah Al Badri also predicted continued price strength. He did not expect oil prices to fall below $100 a barrel this year, but saw no need for Opec to summon an emergency meeting before its next scheduled conference in June. "An increase of production will have no impact on the prices," said Oil Minister Masoud Mirkazemi, who has described oil prices that broke two-and-a-half year highs above $127 last week as "not extraordinary." Mirkazemi did not attend a meeting in Kuwait at the weekend and on Monday that brought together Opec ministers and Asian consumer countries. The Kuwait talks expressed the view prices were being pushed higher by political concerns that could hamper economic recovery and eventually erode fuel demand. Also in Kuwait, leading Opec minister Ali Al Naimi of Saudi Arabia said the kingdom had cut output by more than 800,000 barrels per day in March because of weak demand. Brent crude futures have fallen by more than $7, or around 6 per cent, since a peak above $127 on April 11. The market has been dragged lower by trader sentiment that expensive oil has begun to erode fuel demand, although some economists say there is room for prices to rise further before triggering recession and major demand destruction. US Federal Reserve official Richard Fisher said on Monday increased costs would "result in some unpleasant general price inflation numbers in the next few reporting periods." Iran said last week oil was at "a good price for us", and predicted the demand for oil and its price would follow an upward trend for the rest of the year. Its Opec governor Mohammad Ali Khatibi maintained a similar line yesterday. "Considering all the factors, it seems that the oil price will increase by the end of this year," he told the conference. Opec's Al Badri also said he did not foresee any huge fall in oil prices. "The price will not come down from $100 for the rest of 2011," he told reporters. From Gulf News