Algiers (Platts)--13Jun2008

OPEC President Chakib Khelil said late Thursday that OPEC supported a
Saudi invitation for talks between oil producers and consumers on June 22, but
ruled out a production increase at this time, saying the market was
oversupplied by 500,000 b/d, the official news agency APS reported Friday.

Speaking on the sidelines of a parliament session, Khelil said the
meeting to be held in the Saudi Arabian city of Jeddah was within the context
of ongoing dialogue between oil producers and consumers under the umbrella of
the International Energy Forum.

But APS said Khelil, who is also oil minister of Algeria, ruled out a
production hike, arguing that "there is overproduction of 500,000 b/d". He
noted that Iraq, which is not bound by any OPEC production targets, has
increased production, while Saudi Arabia had also announced plans to raise
production by 300,000 b/d.

OPEC will meet as scheduled on September 9 "to evaluate the market and
take appropriate decisions that would help to stabilize the oil market,"
Khelil was quoted as saying.

The Algerian minister said that oil market fundamentals "at this time are
not influencing oil prices," adding that there were other factors, including
the weaker US currency and rising production costs, affecting the price.

"The problem revolves around the economic crisis in the US, which has led
to a weakening of the dollar as well as threats against Iran, which has
created geopolitical tensions," Khelil said, adding that the role of
speculation on futures markets "cannot be ignored."
--staff reports, newsdesk@platts.com