Friday, September 3, 2010

OPEC: $ 80 - a bust

Wednesday, October 21, 2009, 11:28
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strong growth in oil prices observed in recent days, frightened even those who seemingly very profitable precious black gold. Representatives of the largest oil-producing countries believe that now the cost of a barrel is not correct.

Organization of Petroleum Exporting Countries (OPEC) said that the price of oil at $ 80 a barrel is unreasonably high, and will not be satisfied with a return of prices to a level of $ 100 per barrel, Bloomberg News quoted words of the Secretary General of OPEC, Abdullah al-Badri.

Al-Badri did not think the prices again reached triple-digit values in the foreseeable future, because there is no real shortage of supply. The rally in the oil market due to the fall of the dollar, growth of quotations on the stock markets and speculation, I'm sure the head of OPEC.

Management and participating countries are concerned about the existence of the organization of vast oil and mineral oil in floating storage tanks, which are estimated at 125 million tons. While there are reserves, to talk about the growth in demand was premature.

When we see that the stocks in the floating storage tanks have been exhausted, we will speak about the restoration of demand, - said al-Badri. We consider the price at $ 80 a barrel as some overpaid - he added.

At the same time, rising oil prices allowed to unfreeze some previously suspended due to the downturn in the economy of projects to expand reserve capacity of participating countries. OPEC currently has spare capacity to produce an additional 6-7 million barrels of oil per day. This volume of oil can be put on the market at any time - said El-Badri. However, OPEC's secretary general noted that participating countries must adhere to production quotas more strictly. In September, only 62% of the quota had been met.

with Secretary General of OPEC's solidarity and the president of Venezuela (also included in the oil cartel), Hugo Chavez. Personally, I think that $ 60 - is the right price, given the current situation in the world - he declared the other day.

Meanwhile, the cartel might have to put up with high prices for black gold. The cost of oil this year may rise to $ 95 per barrel, as OPEC does not change production levels after a record contractions, while demand may increase, experts believe that for Standard Chartered. According to the head of the commodity unit Standard Chartered Morgan Downey, the volume of production cuts by OPEC countries surpassed the rate of falling demand in a recession by 1 million barrels a day. By the December meeting of OPEC, the oil price may have to rise to $ 85-95 per barrel, and since then the organization will begin to increase production, says the analyst.

next OPEC meeting will be held in Luanda (Angola) on 22 December. In OPEC, which accounts for about 40% of world oil supply, includes 12 countries: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela.


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