Oil prices stabilise

The US wants Opec to turn on the taps

Oil markets have stabilised following Wednesday's strong gains and comments from the US President Bill Clinton, who had said that crude prices were too high.

The world benchmark Brent blend was trading at $30.58 a barrel in London at 1345 GMT.

In New York, oil markets opened fractionally higher, with light crude futures standing at $32.15 a barrel at 1544 GMT, up 13 cents from Wednesday's close.

President Clinton had said that he would try to convince members of the Organisation of Petroleum Exporting Countries to lift output in order to bring down prices.

Reduced demand

He said that high prices would hinder economic growth and lead to reduced demand, which would not be good for producers.

Prices needed to drop to the low-to-mid-$20s a barrel level for economic growth to be sustainable, he said.

High crude prices earlier this year pushed up US gasoline prices substantially, prompting consumer protests.

After eight weeks of falling, retail gasoline prices are now rising again.

And heating oil prices are at their highest levels since the 1991 Gulf War.

President Clinton said he would raise the oil price issue with Nigeria's President Olusegun Obasanjo during a state visit to the African country this week.

Tougher stance

President Obasanjo told a news conference in London that Opec, of which Nigeria is a member, should move to moderate prices.

But some other leading producers, including Venezuela, are adopting a tougher stance towards consumer governments, saying they have contributed to high prices through market speculation, increased taxes and costly environmental regulations.

Prices had surged on Wednesday after fresh data showed another large fall in US crude stocks.

The US Department of Energy's Energy Information Administration had reported a 4.1 million barrel fall in stocks to 284.7 million barrels in the week ended 18 August.

The American Petroleum Institute on Tuesday estimated stock levels at 297.7 million barrels, down 7.7 million barrels from the week before and close to 24-year lows.

No urgent action

Opec has previously said that it wants prices in the $22-28 a barrel range.

But a senior Opec official on Thursday said he did not see urgent action to lift output as necessary.

"We don't see a real shortage of crude. We think that the fundamentals of the market are okay," the cartel's acting secretary-general Shukri Ghanem said.

But, he added: "If this price level continues, then of course Opec has to do something."

Stable market

Mr Ghanem said that Opec understood the concerns of oil importers and wanted a stable market.

But he blamed market speculators for the recent price surges, saying supply of crude oil from Opec and non-Opec sources was higher than demand.

Opec ministers are next due to meet on 10 September and are expected to increase the organisation's production by at least 500,000 barrels a day.

This would be in line with an informal agreement jointly to lift or cut output by that amount if prices remained outside the $22-28 a barrel range for 20 consecutive working days.