OPEC fears oil prices may hit economies

costly oil could place a major strain on consumer countries with fragile economies, ministers from the Organisation of Petroleum Exporting Countries said yesterday, in their clearest statements yet that they believe fuel demand has shrunk.

Leading OPEC member Saudi Arabia confirmed on Sunday that the kingdom cut output by more than 800,000 barrels per day in March because of weak demand.

Saudi Oil Minister Ali al-Naimi said economic recovery was still weak in some countries.

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“The recovery remains patchy; in many countries unemployment remains at unacceptable levels,” he told a meeting of Middle Eastern and Asian energy officials in Kuwait.

North Sea benchmark Brent crude rose above $127 a barrel earlier this month, its highest level in more than two and a half years.

It has since fallen towards $121, with Monday’s sell-off attributed in part to Saudi Arabia’s comment on demand.

Kuwait Oil Minister Sheikh Ahmad al-Abdullah al-Sabah said in a speech to members at the meeting: “At these high price levels, spending on oil imports could represent a significant economic burden for many import-dependent countries.”

Consuming nations were the first to say the oil price was high enough to erode demand for fuel and knock back economic growth.

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