January 13, 2011 / 4:14 PM / 8 years ago

World can live with $100 oil: Libya

LONDON (Reuters) - Oil prices at $100 a barrel would not harm the world economy and there is no need for OPEC to hold an emergency meeting or add supplies, Libya’s top oil official said on Thursday.

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured on the wall of the new OPEC headquarters in Vienna March 16, 2010. REUTERS/Heinz-Peter Bader

The comments underline the reluctance of the Organization of the Petroleum Exporting Countries to raise output to lower prices. Brent crude hit a 27-month high near $99 a barrel on Wednesday.

“We think there is enough supply and there should not be any meeting at this point in time,” Shokri Ghanem, chairman of Libya’s National Oil Corporation, told Reuters by phone.

“OPEC should not think about any meeting unless it feels there is a real trend established,” he said. “There are a number of factors, some of them are temporary,” he said of the price rise.

Supply disruptions in Alaska and Norway, now being resolved, lifted prices this week. Analysts say Brent crude has been boosted since the start of the year by investment flows and technical factors, which could fade.

Ghanem, who predicted in November that oil prices would get close to $100 by the end of 2010, said a rise to that level would be justified by the rising cost of commodities.

OPEC members receive dollars for their oil and use other currencies to pay for imports such as food.

“As I predicted before, I think that $100 is a correction, and compensation for the fall in the dollar and also for the increase in the price of other commodities, particularly food commodities,” he said.

“I do not think it will affect the world economy.”

OPEC, source of more than a third of the world’s oil, has stuck to a production-restraining policy adopted more than two years ago, when recession hit demand and prices. It is not scheduled to meet to review policy until June.

Since then, many members have increased supplies informally in response to a recovery in demand and higher prices.

Even so, the OPEC members most able to add substantial amounts of oil — Saudi Arabia, Kuwait and the United Arab Emirates — are continuing to deliver most of their agreed supply curbs.

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