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Ecuador Petroleum Minister Says $90-$120 Oil Spread Reflects "Market Realities

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Ecuador Petroleum Minister Says $90-$120 Oil Spread Reflects "Market Realities"
(03/05/08 04:35) (CEP News) Vienna – Ecuador’s Minister for Petroleum and Mines, Galo Chiriboga, told CEP News on Wednesday that a $90-120 spread for the price of a barrel of oil "reflects market realities." In an exclusive interview ahead of the 148th General Meeting of the Organization Petroleum Exporting Countries (OPEC), of which his country is a member, Chiriboga insisted that depreciation in the value of the dollar and market speculators had a role to play in the rocketing of oil prices. “In an ideal scenario, oil price is dictated by market mechanism and should respond to the supply and demand mechanism, but it isn’t at the moment. Oil stockpiles are healthy but prices are still rocketing. The value of the dollar and speculators who are an important component of the market must apportion the blame and not OPEC,” he added. He opined that Ecuador is being hit by a double-edged sword, courtesy of the dollar's depreciation, and that a high oil price was in nobody's best interest. “Ecuador not only exports oil, but also imports subsidiary oil products. We are being hit both ways and are not the only oil-exporting nation facing that dilemma,” Chiriboga added. The minister revealed that an economic commission to look into the role of the dollar was set up at the Riyadh OPEC heads of state summit at the behest of Ecuador’s President Rafeal Correa. The commission is currently analyzing the impact of the dollar. Looking ahead, Chiriboga said that the slowdown of the U.S. economy will definitely have an impact on the oil market. “However, this would be compensated to a certain extent with the consumption of India and China in my opinion,” he added. Responding to the accusation that Ecuador and Venezuela were ganging up as hawks within OPEC, Chiriboga said, “We have our own oil policy. We decided to rejoin OPEC on our own terms and of our own accord in 2007. Its not a question siding with Venezuela. We are a sovereign nation, with our own policies and perspectives. We share solidarity with the whole of OPEC and not just Venezuela.” Ecuador, he added, aspires for the most stable price possible within the market mechanism as “massive price fluctuations do not benefit anyone, the producers or the importers.” He declined to comment on the decision expected later on Wednesday about production levels, but added that Ecuador’s vote would based on "supply and demand permutations." By Gaurav Sharma, gsharma@economicnews.ca, with contributions by Bryan R Thomas, bryant@economicnews.ca, edited by Nancy Girgis, ngirgis@economicnews.ca (END) ©CEP Newswires - ©CEP News Ltd. 2008. All Rights Reserved. www.economicnews.ca

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