Oil prices will stay at current high levels for the rest of this year due to speculation and geopolitical tensions, Algerian state media on Monday reported Opec president Chakib Khelil as saying.

This is already affecting the final consumers in the world. Prices of paraffin, a fuel used for lighting and cooking by most Rwandans has already gone up by Frw23.

The increase has seen paraffin which used to be at Frw600 soar to 623, at most fuel pump stations in Kigali City. This fuel is not getting any government subsidies.

Opec says prices could retreat in 2009 with a recovery of the U.S. dollar in foreign exchange markets following the election of a new U.S. president, and as fundamentals reassert themselves as major market forces, he was reported as saying by government newspaper El Moudjahid and state news agency APS.

"Just like the current surge in oil markets, the (world economic) crisis, will last until the end of the year,” he was quoted as saying by El Moudjahid.

"The oil market will stay above $100 during the current financial year, according to the assessment of Mr Khelil,” APS said in a report on his remarks to Algerian reporters on Sunday. It was not immediately clear which fiscal year APS was referring to.

Khelil, who is also Algerian Energy and Mines Minister, said the factors driving the market at present included "speculation, geopolitical tensions, particularly due to the Iranian nuclear affair and the crisis between Venezuela and ExxonMobil,” APS reported.

The world economy could get some help with the arrival of a new U.S. president, and possibly a new economic policy, "and with this new situation it is very probable that the dollar will start to recover and thus permit a readjustment of the (oil) market,” El Moudjahid quoted him as saying.

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