Even at US$115 a barrel, oil is priced too low, Iranian President Mahmoud Ahmadinejad said in comments published yesterday, adding that the commodity “should find its real value.”
“Oil at US$115 a barrel in today’s market is a deceiving figure, oil is a strategic commodity and should find its real value,” the state broadcaster’s Web site quoted Ahmadinejad as saying on Friday.
New York’s benchmark contract, light sweet crude for delivery in May, surged US$1.83 to a record close of US$116.69 a barrel on Friday.
It had earlier hit an intra-day all-time peak of US$117.
Iranian Oil Minister Gholam Hossein Nozari, whose country is OPEC’s No. 2 oil producer and exporter, rejected on Wednesday calls from oil consuming countries for the cartel to take action to bring down prices.
“The oil price has reached US$114 a barrel. When the price is suitable and supply is higher than demand, this shows the reason is somewhere else and we should deal with this other reason,” he said.
OPEC — which produces 40 percent of the world’s oil — has refused to raise its daily output quota, which is fixed at 29.67 million barrels.
Ahmadinejad said the sharp fall in the value of the US dollar was a driving force behind the rise in oil prices.
“The dollar is no longer money, they just print a bunch of paper, which is circulated in the world without any commodity backing,” he said.
Late last year, Iran announced it had stopped carrying out its oil transactions in dollars.
“At the moment, selling oil in dollars has been completely halted, in line with the policy of selling crude in non-dollar currencies,” Nozari was quoted as saying in December.
The world’s fourth-largest oil exporter, Iran has massively reduced its dependence on the US dollar during last year in the face of US pressure on its financial system amid the standoff over its nuclear program.
On Thursday, OPEC announced that the price of oil sold by its members had hit a record-high of US$106.65 per barrel.
The oil ministers from the 12-nation cartel will be joined by chief executives of major producers as some 500 delegates assemble for the International Energy Forum in Rome today.
Pressure for a rise in the cartel’s output ceiling is likely to intensify as the record crude prices weigh down on a slowing world economy.
Also see: OIL: Oil hits record high after attack on Nigeria pipeline
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