The recent tumble in oil prices is the result of financial speculation and not production levels, Venezuela's energy minister said on Tuesday, adding OPEC should not 'flood the market' with more barrels. 'The price of oil has fallen $20 in recent days, which backs our position that this is not a problem of volume, it's not a problem of production but rather it's linked to speculation,' Rafael Ramirez told reporters. 'Obviously when the price of oil oscillates $20 up or down ... in such a short time it doesn't have anything to do with production.' US crude was down more than $3 per barrel at mid-day to around $121.50, its lowest level in nearly three months after reaching record highs above $147 on July 11. Ramirez said OPEC should not boost production because it would be 'an error to inundate the market with oil such that inventory levels rise, which would lead to a collapse in the price as occurred in the 1990s.' OPEC President Chakib Khelil on Tuesday said oil could fall further to $70 or $80 per barrel but said the producer group should not consider cutting output at this point. Venezuela under the leadership of socialist President Hugo Chavez has been one of OPEC's most ardent price hawks, consistently seeking higher oil prices even as other OPEC members express worries that high prices reduce global demand.
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