London (Platts)--11Jul2007

Current high oil prices are not a consequence of insufficient crude oil
supply but are being driven by inadequate refining capacity, ongoing problems
in the US refining sector, and increased speculation in futures markets, OPEC
secretary general Abdalla el-Badri said Wednesday.

     Badri said OPEC was closely watching the market, however, and would act
immediately if it saw that oil prices were rising because of any crude
shortage.

     "High oil prices, which we are now witnessing, are not a consequence of
insufficient crude supplies," Badri said in a statement released by OPEC's
Vienna secretariat. 

     "Inventory data, continues to demonstrate that crude stocks are ample. US
crude stocks are now at nine-year highs," he added, noting that OECD stocks
were "healthy, and are above their five-year average." 

     "This data, therefore, shows us very clearly, that current high oil
prices are not in any way related to crude supplies," Badri said.

     "Inadequate refinery capacity, ongoing glitches in US refinery
operations, geopolitical tensions and increased speculation in the futures
market are, however, driving high oil prices," the statement continued. "So
even if OPEC were to supply the market with additional crude at this time,
these refinery-related problems mean that any extra barrels would not be
refined into products." 

     "OPEC is closely observing developments in the global oil market,
including the current price trend. If the organization sees any evidence that
oil prices are rising because of a shortage of crude, which does not exist at
this time, it will not hesitate to act immediately to alleviate any such
deficit," Badri said.