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The global economy can withstand an oil price of $100 a barrel,
Kuwait’s oil minister said on Saturday, as other exporters indicated OPEC may
decide against increasing output through 2011 as the market was well supplied.

Analysts have said oil producing countries are likely to raise
output after crude rallied more than 30 percent from a low in May because they
fear prices could damage economic growth in fuel importing countries.

European benchmark ICE Brent crude for February closed at $93.46
on Friday after hitting $94.74 a barrel, its highest level since October 2008.

Arab oil exporters meeting in Cairo this weekend said they saw
no need to supply more crude as stocks were high and prices had been inflated
temporarily by cold weather in Europe.

Asked by Reuters if the world economy could stand a $100 oil price,
Kuwaiti Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said: “Yes it can”.

Iraq’s new oil minister and the head of Libya’s National Oil
Corporation both told Reuters that $100 was a fair price, while Qatar’s
Minister Abdullah al-Attiyah said he did not expect OPEC to increase production
in 2011.

“I do not expect an OPEC meeting before June because oil prices
are stable,” he said.

Some delegates even called for exporters to comply better with
agreed production limits. OPEC members’ compliance with promised cutbacks
reached 56 percent in November, according to Reuters estimates.

When asked if output could be raised, Kuwait’s Sheikh Ahmad
said: “No. More compliance, more compliance”.

Market “well supplied”

The Cairo meeting of the Organisation of Arab Petroleum
Exporting Countries (OAPEC) brought together Arab members of OPEC including top
exporter Saudi Arabia, which has traditionally been viewed as a price moderate,
as well as non-OPEC countries Tunisia, Egypt, Syria and Bahrain.

OPEC cut output drastically after the global financial crisis
struck in 2008 to prop up collapsing oil prices.

As demand has risen steeply in 2010 and is expected to rise
further in 2011, the market is watching closely whether OPEC can release at
least some of its spare capacity to prevent prices from soaring to around $150
per barrel as they did before the crisis struck in summer 2008.

OPEC’s most influential oil minister, Saudi Arabia’s Ali
al-Naimi, said on Friday he was still happy with an oil price of $70-80 a
barrel and there was no need for an extra OPEC meeting before the next
scheduled one in June.

Others in the group have been pressing for a higher price,
arguing that quantitive easing and a weakened U.S. dollar that spurred gains
across financial markets mean the oil price strength is partly nominal.

Egyptian Oil Minister Sameh Fahmy said the current increase in
oil prices was the result of higher demand on heating fuel because of the cold
weather in Europe.

United Arab Emirates Oil Minister Mohammed al-Hamli said crude oil
inventories are “quite high. It’s the highest over the five years average…
The market is well supplied”.