Disruption fear not oil shortage pushing prices up: Iran official

London (Platts)--10Aug2004

Sharp oil price increases are the consequence of oil market fears about export
disruptions in some oil producing countries and not the result of a shortage
of oil, a senior Iranian oil official said Tuesday. 

"The main reason for the increasing oil price in the current situation is not a shortage of crude oil.
It is, rather, anxiety about a possible stoppage of oil exports by some of the
producers," Hojatollah Ghanimifard, the oil ministry's head of international
affairs, told state television. "In addition to that, huge amount of deals in
the oil stock markets push the oil price higher," he said. "Whenever the oil
price is fluctuating, retirement and saving funds, financial institutions ...
rush to oil commodities and stock markets to make quickly profitable deals.
Thus, the fluctuation heats up," he said. Ghanimifard noted that the
differential between prices for Iranian crude and those of lighter crude was
as much as $5.50/bbl. This was because of demand, in particular from the US,
for very light, sweet crude, he said.

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