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.
$4/gal.........no problemo
http://www.cnbc.com/id/23559595/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
I totally agree with you. None of the politicians will touch this because they are not hearing from us. They are walking a tight rope now balancing between those that want to drill for our own oil and open new refineries and the wackos that pressure them about global warming. We need to make our voices heard that it is time to act.
The continued expansion of the money supply doesn’t bode well for immediate future. As the fed funds rate has been cut again more inflation is on the way and oil prices will continue to bump up. All sorts of excuses will arrive with each oil price rise: it’s summer, the Arabs or this or that but in the end a massive wealth transfer is taking place and most of us are on the wrong side of the action.
Massive wealth transfer = GDP
You two are both nuts.
We actually already know it has nothing to do with supply and demands. There is a surplus in both crude oil and refined gasoline. Demand for both is, currently, dropping.
What we have here is a product with price floors set by a cartel, and with prices driven higher by speculators. The only “demand” effecting the price is the people buying contracts for oil for with they have no intention of taking possession.
And, we have Bush's strict energy policy to thank for the low gas . . . . . oh, wait!! My bad - Bush doesn't HAVE an energy policy and could care less that most of America is going broke driving to/from work so they can pay their taxes.
In previous administrations, oil from the SPR has been used to counter OPEC's influence on gas prices. I guess Bush never heard of the SPR.
Hitting the SPR will do nothing for the price of oil, we need to get gov spending under control, or at least make the markets think that so that the relative value of the dollar stabilizes.
US demand for gasoline has gone up every year for the last decade.
U.S. Finished Motor Gasoline Product Supplied
http://tonto.eia.doe.gov/dnav/pet/hist/mgfupus2m.htm
World oil demand remains high as well.
International Petroleum (Oil) Consumption Tables
http://www.eia.doe.gov/emeu/ipsr/t24.xls
Whats to stop the oil spike.. Oil companies make more money for doing NOTHING.. NO DRILLING NOTHING..
Never happened.
U.S. Petroleum Reserves > SPR Facts & Frequent Questions
See Past Sales and Past Exchanges:
http://www.fe.doe.gov/programs/reserves/spr/spr-facts.html
US and World drilling Activity hasn't been this high in a couple decades.
Rig Counts
http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm
Too bad the US won't open up the most promising areas to them.
Funny, hitting the SPR has done wonders for the price of oil in the past and has acted as a counterbalance to OPEC. Controlling spending at all levels of government is always a great goal, but I fail to see how that's going to affect the price we pay at the pump.
Without an energy policy that reduces or eliminates the foreign control over our domestic gas prices by encouraging drilling and building new refineries, we remain at the mercy of OPEC and Hugo. I'm still waiting for the staunchest liberal to show me how that benefits America.
Actually, it did in the 70s and 80s during the so-called "oil embargoes". Your website conveniently stops at the early 90s.
The Department of Energy web site I linked above tracked EVERY sale and exchange of oil for the SPR. What you claim never happened.
Here is a tracking of the SPR starting in 1982. Please show me where there was a withdraw in the 80s.
U.S. Weekly Crude Oil Ending Stocks SPR
http://tonto.eia.doe.gov/dnav/pet/hist/wcsstus1w.htm
The SPR wasn't created until the mid 1970's.
Releasing Crude Oil From the Strategic Petroleum Reserve
http://www.fossil.energy.gov/programs/reserves/spr/spr-drawdown.html
Draining the SPR might cause a tempory blip on the spot market and give a few buyers a good deal but it would do nothing to affect the price of oil as it would do nothing to increase production only consumption.
From the comments on threads like this it is clear the public has but a foggy notion of how economics works. Sad.
Or the meaning of “Strategic”.
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