Oil official blames higher prices on growing political tension

KUWAIT, Aug 5 (KUNA) — Assistant Undersecretary for Economic Affairs at the Ministry of Oil Nawal Al-Fezeih, who is also Kuwait’s representative at the Organization of Petroleum Exporting Countries (OPEC) on Sunday played down the current hikes in price of Kuwaiti crude oil.

Al-Fezeih, who was speaking to the Kuwait News Agency (KUNA) in an exclusive interview, said the higher prices were due to growing global economy, which had a direct impact on the price of oil and its by-products. She said the higher prices were also due to the political unrest in more than an oil-producing country.
She predicted even more growth of the global economy in future, specifically in India, China and the US causing higher oil prices.

She said the World Bank predicted a 5.2 growth rate of global economy in 2008 and this meant higher demand for crude oil and its by-products specifically by the transport sector including road and air transport.
She stressed that the increase in demand for oil would be in the order of 1.3 million barrels daily next year, which was a significant increase.

She added that the increase would be a landmark one, but not as much as in 2003 when demand for crude oil increased by three million barrels per day.
“The second factor affecting prices is linked to the current geopolitical developments, specifically the international political and military tension in some production areas like the Middle East as well as the rising arguments between the US and Iran on the strength of the latter’s nuclear file.

She said the higher prices affected specifically light crudes, from which gasoline is extracted for consumption in cars and diesel required for industry. She said this was largely due to restrictions placed on such commodities in industrialized countries.

Kuwait News Agency