ABUJA - The latest spike in oil prices is "very uncomfortable" and it is having a negative impact on the world economy, OPEC President Edmund Daukoru said on Wednesday.
Daukoru, who is also Nigeria's top oil official, told Reuters the Israel-Hizbollah conflict was responsible for the latest spike, which saw US crude oil futures hit US$78.40 a barrel last week, and that OPEC had plenty of spare production capacity should it be needed.
"If it would have stabilised around the mid-60s, I don't think people would complain too much. We are getting used to that, but the latest shootup to the mid-70s and above is very uncomfortable," Daukoru said on the sidelines of a conference in the Nigerian capital.
"Clearly the latest flare-up between Israel and Hizbollah that is really the reason for the latest spike," he said. "It is always unfortunate if we have to address issues outside the power of OPEC."
High prices bring more revenue to OPEC in the short term, but exporters worry that sustained increases hurt the global economy and encourage consumers to invest in alternative energy.
Asked if current prices were hurting the economy, he said: "At such high prices it must have an impact."
Daukoru said he would travel to the Middle East Gulf next week to address some internal OPEC issues such as a forthcoming summit, and would take advantage of the trip to discuss the oil market situation.
"We do our best to moderate the market, but with the current level of volatility one only can take short term decisions. We tend to react at three-monthly intervals," he said.
Daukoru said OPEC had spare production capacity available if it was required.
"We should have even more than 2 million barrels per day available, so whether the disruption comes as a result of Iran or some other cause, we will be able to put on the extra capacity provided there are refineries to take it," he said.
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