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Opec may launch currency basket

October 28, 2007

CARACAS, Oct 27: Opec is likely to discuss creating a basket of currencies for oil pricing at its next summit due to the steady decline in the dollar, Venezuela’s Energy Minister Rafael Ramirez said on Friday.

“The need to establish a basket of currencies ... will probably be a point of discussion in the next Opec summit,” Ramirez told reporters during an evening event in the presidential palace.

“The dollar as a benchmark currency has been weakening quite a lot and it creates distortions in oil markets.” The Opec is slated to hold a summit of the heads of state of Opec nations in November and a meeting of ministerial delegates in December.Ramirez added that world oil markets are well supplied with petroleum inventories above average, reiterating suggestions earlier this week that Opec is not likely to hike output to calm record-high prices.

“We have enough oil in the market, the inventory levels are above the average of the last five years,” he said.

Oil prices have soared in part because of a weakening dollar that tumbled in the wake of an interest rate cut by the US Federal Reserve.

Officials from the United States and China — the world’s two largest oil consumers — have expressed concern that current crude prices are too high.