Opec lays blame on weak dollar for surging oil price

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Instead, Opec, the Saudi Arabia-led cartel of mainly Arab and Middle Eastern producers, is blaming President George Bush and his central banker Ben Bernanke for the continuing weakness of the dollar amid the backdrop of a poorly performing US economy.

OPEC chief Chakib Khelil said overnight that he believes the world's surging oil prices are not likely to fall.

Khelil, who is also the Algerian energy minister, is on record as saying that he believes global prices of crude will not peak until they have hit $170 a barrel. He reiterated the cartel's position that Opec and its members were pumping enough oil.

At a conference in Algiers he said that while strong market demand, especially from China and India, is a major reason prices will stay as high as they are, one of the main factors is the plunging greenback, with Khelil saying that crude prices "have nothing to do with supply and demand".

Instead, Khelil laid the blame squarely at the door of the managers of the US economy saying crude prices surged once the "US Federal Reserve lowered interest rates to boost the American economy, which weakened the dollar.''

Crude prices started the week little changed after the long weekend in the US for Independence Day. US crude traded in New York at $143.80, down $1.49, while in London Brent was trading at $144.40, down 20 cents. Oil for August delivery rose to a record $145.85 a barrel last week.

Prices have more than doubled in the past year and many economists and analysts who missed the boat with their forecasts for oil over the past 12 months are now making up for that with predictions of $200 a barrel over the next two years.