OPEC - PC's idea doesn't work for us

Oil cartel OPEC on Monday rejected India's call for regulating crude prices through a price band, saying the market was the best judge and forecast prices climbing to USD 170 a barrel on summer demand in the US.

"Producing and consuming nations never agree on any price... They never agreed with (OPEC) price band (that operated between 2000 and 2005). Then we did away with the price band... We are never going to agree (on the price band)," OPEC president Chakib Khelil told reporters on the sidelines of the World Petroleum Congress here.

Stung by high oil prices driving inflation to 13-year high of 11.42 percent, Finance Minister P Chidambaram had, at a meeting of energy ministers in Jeddah last week, asked the Organisation of Petroleum Exporting Countries (OPEC) to operationalise a price band mechanism wherein crude prices move within a specified range.

The speculative premium has been put by New Delhi at USD 60 a barrel. Khelil, however, said: "We (should) let the oil market decide."

India has blamed speculators for the rise in crude prices that have touched an all time high of USD 142.99 a barrel, but western oil firms pinned it on demand-supply mismatch.

"I don't think you can blame the speculators for the high oil price," Jeroen van der Veer, chief executive officer of Europe's biggest oil producer Royal Dutch Shell Plc, said at the 19th WPC.

While maintaining that there was more than enough oil to meet global demand, Khelil said the pressure on Iran, the second-largest producer in the cartel, as well as a falling dollar may drive prices to USD 170 a barrel.