OPEC Chairman Says Oil Prices Won’t Go Down

The cost of a barrel of crude oil has edged closer to its all-time high after OPEC president Chakib Khelil warned that oil prices “will not come down”. Ahead of a meeting with EU officials in Brussels today, he said that the cartel had done all it could to ease prices.

His comments pushed up benchmark crude in London by $1.24 to $137.15 a barrel - it hit an all-time high of $137.69 a barrel on June 6. The spot price - the cost of buying a barrel of oil for delivery that day - has risen close to $140.

European Union Energy Commissioner, Andris Piebalgs, said he was “not convinced” speculators are to blame and repeated his call for the Organization of Petroleum Exporting Countries to pump more oil and scrap production quotas. But OPEC Secretary-General Abdalla el-Badri said: “The market is currently hijacked by speculators,” including hedge funds. “There is no shortage of supply as I said before.”

OPEC members besides Saudi Arabia have no intention of raising output to bring down near-record prices, he said. This will be the “main point” for today’s discussions, which will also include Mr Khelil and French Energy and Environment Minister Jean-Louis Borloo.

Saudi Arabia, the world’s biggest oil exporter and OPEC producer, plans to raise production for a third straight month in July and will further increase output as needed to curb record-high prices above $135 a barrel.

Saudi Oil Minister Ali al-Naimi announced the increase at last weekend’s summit of 35 producing and consuming countries in the Saudi port city of Jeddah. Mr Khelil and ministers from Venezuela and Libya have said the Saudi initiative would fail to lower prices.