Posted on 03/10/2008 8:33:35 AM PDT by Froufrou
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.
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.
OPEC members meeting in Vienna last week decided to hold production flat, insisting markets were well supplied and blaming record prices on factors outside the group's control, including speculators and what Khelil called the "mismanagement" of the U.S. economy.
Speculators have piled into oil and other commodities as a hedge against the weaker dollar and inflation as the U.S. economy slows due to a credit crunch, the mortgage crisis and high energy costs.
Khelil said OPEC had left output unchanged because it wanted to assist global economic growth, El Moudjahid and APS reported.
The group made its decision in the knowledge that demand was expected to dip by 1.4 million barrels per day (bpd) in the second quarter of the year and that stocks in consuming countries were at comfortable levels, Khelil said.
"If we had increased our production given all these factors, you wouldn't have been able to miss the impact on prices," he said, suggesting prices would have slid.
"We left our output unchanged so as not to disturb the market further and to help the world economy resume its momentum of growth," El Moudhajid quoted him as saying.
It will last as long as oil based fuels are a monopoly.
If a democrat wins the White House and the price of oil drops way down, then we'll know beyond any shadow of a doubt that we were being ripped off over politics and that it had nothing to do with supply and demand.
You need to wait to find that out....I am ready to accept the fact now.
We’re in a sheik-down.......
monopoly?
It will last as long as W is in office.
I thought that the liberals said that oil prices only go DOWN during an election year.
When Bush just found out that we will pay $4 bucks a gallon by June, I knew than that the arabs are trying to force our election to obama. If he wins the shieks will be amazed when it is not the arabs that get empowered, it will be the blacks of this country who will.
The NPR commentary suggested that the bubble could break at any time, driving the price as low as $30. Or it might not, leaving a possibility of $150 oil. Apparently the world is awash in physical petroleum -- oil stocks are plentiful. The only shortage is in "virtual oil", as speculators continue to bid the price up.
Well, I am not much of an Arab oil fan but this guy is right. Bad politics and arrogant, self-serving pricks running (ruining) our economy has caused this financial meltdown. We were likely due for a free market correction, but the financial market has been manipulated to the point that is beyond control of any individual or group to fix quickly. My own numbers show recession Q1 & Q2 of 2008 and slipping back into recession Q2 & Q3 of 2009. I assume we’ll see a modest recovery in 2010 but any other major blow to our economy we’ll see a collpase of the entire financial house of cards and short depression.
Let the terrorists have the Arab oil.
I don't see how they could possibly predict how oil prices or economies could be different or improved directly as a result of a new U.S. president. Hell, for all they know, a Democratic victory could spell the end of the U.S. as an economic power.
Sure, it’s a shell game. If we were to get organized and stage a stand-off, we could derail the train. It’s worth a try. But we’d need a Super-FReeper to organize it...
Okay, I now see what you are saying. Thanks.
I am old enough to remember the farce "oil embargo" of the 70's. It lasted until it looked like America would be forced into actuall drilling our own and exploring for real altrnatives.
We are already paying for Dubi to have the tallest buildings in the world. It is time the oil price hurts us into action...provided that is what happens.
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