OPEC producers this morning appeared set to press ahead with tighter supply restrictions, despite consumer country fears about the impact on economic growth of high oil prices.
Leading supplier Saudi Arabia dismissed suggestions that the Organisation of the Petroleum Exporting Countries was to blame for prices that recently hit a 13-year high, saying crude supplies were sufficient.
Saudi Oil Minister Mr Ali al-Naimi said OPEC, meeting tomorrow, already was implementing April oil cuts to combat lower seasonal second quarter demand. OPEC had no control over the speculative hedge funds who have adding a heavy premium this year to oil prices, the minister said.
"As far as Saudi Arabia is concerned April 1st has been implemented and I believe others have done so as well," Mr Naimi told reporters.
"Throwing more oil on the market, because of prices where they are today, would be destructive," he added. "That would make a glut and there is already a surplus on the market." World oil prices rose on the Saudi comments, US crude adding 22 cents to $35.67 a barrel.
Mr Naimi declined direct comment on the likely outcome of OPEC talks that must decide whether or not to proceed with output curbs, agreed in February for implementation from April.
But his comments were read by analysts as making a clear case for not deferring a one million barrel a day OPEC output cut that takes effect from April 1st.
"Speculators have divorced prices from levels warranted by market fundamentals by several dollars a barrel," said consultant Mr Gary Ross of PIRA Energy.
"OPEC has to focus on the fundamentals because if speculators sell out and OPEC is supplying too much it runs the risk of a very sharp price decline."
The UAE, worried that oil prices are too high, has proposed OPEC consider postponing the April reduction, perhaps by a month.