Opec worried about Egypt, but not acting yet

Opec worried about Egypt, but not acting yet

London: Oil producer group Opec said on Monday it was worried about the unrest in Egypt but saw no reason to boost output to cool prices at the moment and would add more supply only if it saw a shortage in the market.

Oil prices have spiked following tension in Egypt with Brent crude approaching $100 per barrel on fears instability could spread to the Middle East, which together with North Africa produces more than a third of the world’s oil.

Secretary general Abdullah al-Badri told reporters in London the Organization of the Petroleum Exporting Countries did not at this stage think it was necessary to call a meeting before its next planned gathering in June but added that the mood was changing due to the situation in Egypt.

“Before the Tunisian and the Egyptian crisis, we don’t see it (an extraordinary meeting). But now, I don’t know if this crisis will escalate. I hope not," al-Badri said when asked about chances for an Opec meeting before June.

Al-Badri confirmed Opec ministers and consumers would discuss oil output policy on the sidelines of an international energy conference in Saudi Arabia on 22 February, but said a formal decision there was unlikely.

“Riyadh is not an Opec meeting. Nobody asked me to prepare anything, so I really cannot tell you anything," he said.

Al-Badri said he did not expect the unrest in Egypt to affect oil flows through the Suez canal or the Sumed pipeline.

“I think that the flows will continue," he said.

“We are watching the situation because there is some good quantity (at stake) and if there is a problem there we have to do something," he told reporters at a conference.

“Inventories are very high and our spare capacity is also 6 million barrels. I don’t see why we have this high price," he said.

“The market is well supplied but at the same time if we see some real shortage we will intervene," al-Badri said.