China says oil prices too high as meets with OPEC

By Aizhu Chen

BEIJING, Oct 24 (Reuters) - China, the world's number-two oil consumer, warned that crude prices are too high, as the country's energy officials sat down with producer cartel OPEC on Wednesday for their first formal meeting in two years.

Record-breaking oil prices, China's strategic stockpiling, its companies' forays overseas and exporting nations' designs on the Chinese refining and retail sector are all on the agenda for the day-long OPEC-China energy roundtable.

"The discussion here is mainly to look at the future, to see where these prices are taking us, to forecast demand and supply," Abdullah al Shameri, head of the office of the Secretary General, told reporters on the sides of the meeting.

The last meeting was in 2005, when the Organization of the Petroleum Exporting Countries (OPEC) said China had changed the culture of oil markets, and asked for a "road map" to help them better understand the country's volatile demand growth.

Since then oil prices have risen by more than $25 a barrel, but China's state-set pump prices have not been increased since May 2006, meaning the rally has had little impact on Chinese consumption.

A senior policy maker from China's energy bureau said China had no problem finding crude, but objected to prices that last week hit a record of above $90 a barrel CLc1. By Wednesday the benchmark price had retreated below $85 a barrel.

"The oil price is too high, but we don't see any shortages," the official, who declined to be named, told reporters.

Beijing last December held a meeting of top oil consumers, a rare move to take leadership on global energy issues, urging them to join together in the face of resurgent producer power.