Oil prices could rise about $25 from their present levels to $110 a barrel without threatening the world economy, OPEC Secretary General Abdullah Al-Badry said Friday.
Crude prices have dropped steeply in recent months with the U.S. benchmark selling Friday at just below $85 a barrel. That’s about 20 percent less than where they were in February, and Al-Badry said it’s far below what consumers can afford.
"$110 is not a threat to the world economic growth,” Al-Badry told reporters a day after OPEC oil ministers agreed to keep the cartel’s total output ceiling at 30 million barrels a day.
Many of the 12 member nations of the Organization of the Petroleum Exporting Countries consider present prices too low and came to Thursday’s meeting seeking a production cutback to reduce supplies and push prices upward.
That, however, was opposed by OPEC kingpin Saudi Arabia — and Saudi oil minister Ali Naimi had even initially suggested he was looking for a production boost. The Saudis have signaled their readiness to make up for any shortfall caused by international embargoes on Iranian crude and already account for about a third of total daily OPEC output of nearly 32 million barrels, including Saudi and other overproduction.
The oil sanctions against Iran are part of a series of international economic penalties being imposed to push the Iranian government into curbing uranium enrichment.
The United States and other governments fear Iran is enriching uranium to make nuclear weapons. Iran, however insists it is enriching only to make reactor fuel for peaceful nuclear energy uses.
The international concerns are sparked by Tehran’s refusal to accept nuclear fuel from abroad.
Sourced: http://fuelfix.com/blog/2012/06/15/opec-chief-sees-oil-at-110-a-barrel-as-fair/
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[ posted by AM, June 18, 2012 21:22 ]
Al-Badry must be living in cuckoo land if he honestly thinks $110 per barrel is not a threat to the global economy.
OPEC have been moving the goalposts for decades, it wasn't long ago when Kuwait were talking about $75 being the "fair price" for a barrel of oil, and the price hovered around that price range until the events in Egypt and Libya (and then Iran) saw the price shoot upwards. That $75 figure was for Brent too, which tends to trade at a higher price than the US benchmark. In the US, when US light crude topped $100, gas prices hit $4 per gallon in most states, which as you'd imagine didn't go down at all well with the American public. So much so that fuel prices are a major concern and talking point in the presidential race, with talk of getting it down to a more acceptable $2.50 per gallon. As the US price hit $100, Brent was around $120, and look at the effect its had, even China and India got hit by that, and as for the Eurozone and the UK...... well you already know that anyway.
Thankfully the Saudis are well aware of how much the price of oil can hit the global economy and are trying to keep a lid on the situation. They are the biggest player, and Al-Naimi has sounded the warnings several times.
Just someone needs to tell George Osborne that this 3p a litre rise in August is complete and utter madness. Even now after fuel prices have dropped something like 10p a litre in the last month, it's still too high, and needs to come down even further, even back into two figures (99.9p and lower!), if this country is ever going to get back on its feet properly.