OPEC and Russia play down price war threat

Russia and rival oil-producing cartel OPEC have played down the threat of a price war although Moscow insisted it was right to boost exports recently because of growing market demand.

Russia's energy minister, Mr Igor Yusufov, said after meeting OPEC secretary general Mr Alvaro Silva Calderon, there was no reason to fear a slide in oil prices.

"The rise in oil production in Russia as in other countries in OPEC is aimed at satisfying growing market demand," Mr Yusufov said. "There is no reason for concern today given the growth of the US and western European economies."

Mr Calderon said he believed Moscow, the world's second-largest oil exporter, was cooperating with OPEC to stabilise the market.

The meeting followed criticism by OPEC of recent export increases by Russia in a bid to boost its market share. Russia increased exports by 150,000 barrels a day from July 1st, despite OPEC's call for Moscow to limit sales in a bid to stabilise oil prices.

The 11-member cartel, which produces more than 30 per cent of the world's crude, believes oil prices remain fragile and is concerned that an increase in global oil supply would send prices back through the floor. - (Reuters)