OPEC President Concerned About Oil Costs

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The president of OPEC (search) said Sunday the oil cartel is concerned over the rising price of oil and will be looking at ways to ease prices at a September meeting.

Sheik Ahmed Fahd Al Ahmed Al Sabah, who is also Kuwait's oil minister, said in a statement that the Organization of Petroleum Exporting Countries will be exploring various options to keep crude prices at moderate levels at its Sept. 19 meeting in Vienna.

The statement, which was carried by Kuwait's state-run news agency, did not say what the options were.

Oil prices reached record highs on the New York Mercantile Exchange (search) last week, hovering below $68 a barrel before the close of trading Friday.

The spike occurred amid fears that Hurricane Katrina (search) would disrupt American oil and natural gas production in the Gulf of Mexico (search).

But crude oil futures ended up closing Friday slightly down at $66.13 a barrel from their record highs as it became clear the hurricane would not effect the refineries.

"We are becoming increasingly concerned at the continuing high level of oil prices, which does not properly reflect the underlying fundamentals of the market," Sheik Ahmed said in his statement.

Sheik Ahmed said oil supplies were "plentiful" and that OPEC has been producing 1.5 million barrels per day more than needed during the third quarter of 2005.

Existing spare capacity in OPEC countries, together with new capacity additions early next year, will be more than able to cover the growing demand throughout the coming winter and in 2006, he added.

Much of the new capacity will be provided by OPEC and non-OPEC members using lighter crudes in demand by the market, he said.

Based on such fundamentals, Sheik Ahmed said he expected some price moderation instead of further rises.