The US, EU and other oil importers said crude oil costs are too high and may rise further in the months ahead to threaten economic growth after OPEC said it won't boost production quotas.
OPEC said on Thursday it will leave quotas unchanged at 21.7 million barrels a day because speculation about a war in Iraq, not demand, has added as much as US$8 to the price of oil. OPEC's oil-price index reached US$27.45 last week, near the top of the group's target price range of US$22 to US$28.
High oil prices are an obstacle to economic growth, particularly in developing countries, US Energy Secretary Spencer Abraham said. He reiterated US concerns that OPEC supply restraints create artificially high prices that harm both producers and consumers.
"High prices may be pleasing to producers in the short term, but in the long term, volatile pricing regimes of this kind are destabilizing and harmful to all participants," he said at the three-day 8th International Energy Forum in Osaka, Japan.
OPEC sets its oil price to meet national budgets, while consumers rely on competition for efficiency in energy supply, said Robert Priddle, executive director of the International Energy Agency, an adviser to 26 industrialized nations.
IEA members "prohibit collusive arrangements" similar to OPEC's, Priddle said. OPEC's actions mean that oil prices are "not determined in a free market." Norway, whose oil exports are only exceeded by Saudi Arabia and Russia, said it's concerned high prices may hamper global economic development. Norway in July ended a production cut of 150,000 barrels a day in support of OPEC's plan to stem a drop in prices.
"If you come up to US$30 a barrel or higher, we know that this is unproductive," said Einar Steensnaes, Norway's oil minister.
Crude oil for November delivery closed at US$29.84 a barrel on the New York Mercantile Exchange on Friday, after gaining 49 percent this year. Crude oil reached an 18-month high of US$30.32 a month ago.
India, which imports 70 percent of its oil, said current prices hinder the country's economic development.
"Prices should stabilize at US$22 to US$24 -- that's sustainable," India's Oil Minister Ram Naik said in an interview at the forum.
Oil consuming countries wanted the Organization of Petroleum Exporting Countries to increase production quotas this week as a cushion against a drop in supply and a surge in prices should war erupt.
"Consumers may want a bit of extra oil, to be on the safe side, but it doesn't seem as if there's any product shortage, especially given the current poor demand outlook," said Thomas Hilboldt, head of Asian oil and gas research at Salomon Smith Barney HK Ltd in Hong Kong.
Takeo Hiranuma, Japan's minister of economy, trade and industry, was among those who said he would have liked OPEC to boost quotas. He also said he's not concerned about a shortage of crude because supplies are sufficient.
OPEC ministers vowed to increase production if demand increases, or if a war with Iraq disrupts supplies. The group is already pumping 1.8 million barrels a day, or 8.3 percent, more than its official ceiling.
"We will continue our long-standing policy of keeping excess production capacity on standby," Ali al-Naimi, Saudi Arabia's oil minister, told delegates at the International Energy Forum. Saudi Arabia aims to keep the market "free of disruptive price swings," he said.
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