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OPEC powerless as oil prices keep climbing

VIENNA: OPEC ministers left Vienna on Wednesday powerless over oil prices, which kept climbing despite the cartel’s commitment to offer up every last barrel of its spare production to reassure consumers.

“We have done everything we can. This is the time for others to do what they can,” Libya’s Oil Minister Fathi Omar Bin Shatwan told Reuters ahead of his departure.

The deal, struck on Tuesday, means the 11-member Organization of the Petroleum Exporting Countries is putting its remaining two million barrels a day of crude on the block, with most of the extra oil held by top exporter Saudi Arabia.

The agreement has been welcomed by the European Union and Britain’s finance minister Gordon Brown, among OPEC’s harshest critics in the run-up to the meeting. But with oil edging further above $67 a barrel, OPEC’s argument that gaps in the global refining network were to blame gained authority.

Hurricane Rita is accelerating towards the Gulf of Mexico and threatening U.S. refineries spared by Hurricane Katrina last month. The market fears a shortage of gasoline and heating fuel in the world’s biggest consumer, the United States. “We’re giving the patient the wrong medicine. The patient does not need crude oil, the patient needs products. This is the problem,” Shatwan said.

Prices are likely to remain hostage to downstream supply disruptions because the world’s refineries are too stretched to handle more crude. The last new US refinery opened three decades ago. reuters

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