Algeria’s energy minister said on Wednesday he would oppose at OPEC’s next meeting in September any proposal to hike output, and he sees consensus among group members to hold output steady until then.

World oil prices are near $65 a barrel, up around 30 percent from lows hit in January amid concerns over militant attacks in Nigeria and tensions between Iran and the West, but well below last year’s all-time peaks near $80.

The global oil market is oversupplied by about 200,000 barrels per day, with about $10 per barrel of the oil price related to geopolitical tensions, Algerian Oil Minister Chakib Khelil told Reuters. He also said current oil prices are not a threat to economic growth in developed economies.

“I don’t think (raising production) is going to be helpful at all,” Khelil said on the sidelines of a United Nations conference. “Definitely there are a lot of calls for increasing supply but I don’t think that is the issue here.”

He said refinery problems were a key reason U.S. retail gasoline prices have jumped to a record over $3 a gallon in a recent survey by analyst Trilby Lundberg.

“The issue is lack of refinery capacity,” he said. “As long as we have a bottleneck or continue to have a bottleneck, the crude (oil output) increases are not going to help much.”

Qatar’s energy minister, also at the conference, told Reuters the world oil market is “saturated” and said he sees no need for OPEC to hike production.

“The problem is that these prices are impacted by political problems,” said Abdullah bin Hamad al-Attiyah. “I can say the market is saturated with oil.”

The OPEC cartel has already agreed on two cuts since last autumn, totaling 1.7 million barrels per day, to trim global supply after a steep slide in crude prices from record heights last summer. The group is next scheduled to meet in September.

Algeria’s Khelil said compliance among OPEC member states was good but “not 100 percent.” He did not elaborate.

Beside global geopolitics, Khelil said oil prices remain high on worries over Nigeria, where up to 600,000 bpd of crude remains shut in due to rebel attacks.

“What OPEC should do is wait until September; we will meet and see and we will look into the situation. Maybe by then Nigeria would have come back into the market and then we will decide
what to do,” Khelil said in the interview.

“But my own feelings are that we don’t need really even in September to do anything because we are supplying sufficient crude and the issue is really geopolitics more than anything else at the moment,” he added.

“We may need to do something later in the year or early next year, ” Khelil added.

He said he expects oil prices to remain volatile near-term as speculators react to headlines. He said he expects benchmark Brent crude to stabilize between $55 to $65 per barrel, possibly higher, for the rest of 2007.

“The level of prices we have now has not had any impact on growth or inflation in the developed world,” he said, adding the reason was that those economies are service oriented now.

He said the Organization of Petroleum Exporting Countries welcomes attempts to boost production and use of renewable energy sources worldwide such as ethanol and other biofuels.

“I don’t think we consider it as a threat to oil long-term.”