Iran: Crude Oil Supply Sufficient

TEHRAN (FNA) A senior Iranian oil official said on Thursday there was “enough” supply in the market at this time and blamed the high crude price on excessive liquidity in financial markets.

“The problem is not shortage of supply,” Hojjatollah Ghanimifard, international affairs director at the National Iranian Oil Company, told Reuters a day after crude hit a lifetime high of $100 per barrel.

“I think the main problem is outside the oil market. Too much liquidity is available,” Ghanimifard said. “A big part of it is in the paper market of crude oil.”

He said that figures “right now show we (have) enough” crude supply in the market, but added that there was a shortage of refining capacity during the winter season in the northern hemisphere.

Iran is OPEC’s number two producer but Ghanimifard declined to “speculate” on what the Organization of the Petroleum Exporting Countries might do at its next scheduled meeting on Feb. 1 in Vienna.

When asked about the Vienna meeting, another Iranian oil official, who declined to be named, said, “We have a month to go… OPEC ministers normally look at demand/supply and stock levels and then make a decision. Let’s wait for Feb. 1,” he said, declining further comment.

Oil prices dipped on Thursday after leaping to $100 the day before, amid a rush of investor demand fuelled by expectations of thinning US stockpiles, the falling dollar and geopolitical risks.

Indonesia’s OPEC governor earlier told Reuters the producer group might decide to increase oil output in February, saying it has the capability to raise production by 500,000 barrels per day (bpd), just over half a percent of global supply.

Oil’s surge on Wednesday was partly helped by a fresh wave of violence in Nigeria and Algeria, stoking worries of more supply disruptions from the two OPEC members.

OPEC supplies more than a third of the world’s oil.