Currently over 130 dollars a barrel, oil prices keep climbing. The oil producing countries (OPEC) affirm that their production is stable - the real cause of the price hike, they say, is financial speculation.
The prognosis is clear: at 133 dollars a barrel, the price of oil has not finished its ascent. Voices call out – begging oil-producing countries to increase their production with the hope that prices will fall. But the majority of oil-producing nations are already at maximum capacity.
“We want to increase production, but where is the consumer?”
During George W. Bush’s presidential visit to
For a long time the Saudis believed that the international demand was not significant enough to increase output. During a press conference, the Saudi oil minister, Ali Al Nouaimi, said, “We are ready to increase our production, but where is the consumer?” According to Al Nouaimi, “We are not able to increase our production if there is no additional demand.”
“There is no queue waiting to buy oil,” adds Pierre Terzian, director of the weekly publication Pétrostratégie.
Recently, “the Saudis adjusted their production mainly to cover the lack of oil production in
Why do the prices increase?
Abdullah Alalami, a Saudi economist, blames “the international financial markets’ speculations on the price of oil.” Abdullah Rashid, a journalist from the United Arab Emirates, agrees that “the price problem is strongly related to speculations.” However, he adds, “the market does not suffer from an oil shortage. There is more supply than demand. Thus even is the OPEC countries increase their production capacity, it will not affect the price.”
Then who is to blame for the increasing price of oil? “Ask the bankers,” Pierre Terzian answers wryly when asked by
Tense geopolitical context
According to the Saudi economist, the insecure climate in the
The markets anticipate tensions in the region, and “as a result, certain countries stockpile oil and sit on it.”
The economist is pessimistic, and believes that before the end of the year, “oil prices will continue to climb upwards of 150 to 160 dollars per barrel.”
Date created : 2008-05-31