Opec producers yesterday sought to play down expectations of a quick fix for an oil price scare that is threatening to derail global economic growth.
The Organisation of Petroleum Exporting Countries holds informal talks in Amsterdam today to consider a Saudi proposal to increase production quotas by at least six per cent.
But Opec is telling consumer nations that it is not to blame for a spike in prices that has kept crude above $40 a barrel for 10 days. US crude eased 25 cents to $40.55 yesterday.
"I don't think that control is in Opec's hands," UAE Oil Minister Obaid bin Saif al-Nasseri told Reuters on his arrival in Amsterdam. "There are many factors behind these prices."
The cartel is under heavy pressure from major consuming countries to take action and open the taps on what is left of its spare production capacity.
"It is crucial for the stability and prosperity of the world economy that Opec act now to achieve a more sustainable price," said British Chancellor of the Exchequer Gordon Brown.
"It's certainly a great risk. Nobody wins when the very positive development of the global economy is put at risk," said German Economy Minister Wolfgang Clement.
US refinery bottlenecks, Middle East security worries and heavy speculation on crude futures by investment hedge funds have all helped drive up oil prices.
Opec ministers will gather for a short meeting this morning ahead of a scheduled conference of oil producing and consuming countries that runs until Monday.
But the 11-member cartel will wait until a full meeting in Beirut on June 3 to agree policy, by which time $40 oil may be more firmly entrenched.
"It is not an extraordinary meeting. We can only send some signal to the market," Iranian Oil Minister Bijan Zanganeh said of today's talks.
Leading producer Saudi Arabia has called for output quotas to go up by at least 1.5 million barrels daily from Opec's official 23.5 million bpd limit.
But the group freely admits it is already pumping more than two million bpd in excess of formal quotas. Spare capacity is limited mostly to Saudi Arabia which has already informed buyers it will lift deliveries in June.
Beyond that, say traders, oil price direction is largely in the hands of the big investment funds, mostly US based, who have taken oil markets by storm this year.
"The price can go higher," Ed Buckley, portfolio manager at Vizor Investment Management told Reuters this week. "In the next three to six months $50 a barrel is not out of the question."
Consumer nations have made clear they have no intention of tapping emergency reserves to calm prices.
"It is out of the question," a spokesman for the Paris-based International Energy Agency, stockpile coordinator for 26 industrialised nations, told Reuters.
"In governments nobody is seriously thinking about using these stocks because they are strategic stocks. We use them when there is any physical disruption in oil supply. We do not use them to try to influence the market."