OPEC 'concerned' at recent surge in oil prices
Thursday, 18 October 2007
VIENNA, Oct 17 (AFP): The powerful oil cartel OPEC expressed concern yesterday at the latest surge in oil prices, but insisted that the current record highs were not justified by the fundamentals.
OPEC chief Abdalla Salem El-Badri said in a statement that the Organisation of the Petroleum Exporting Countries "is carefully watching developments in the oil market and has observed with concern the recent escalation in oil prices."
"While (OPEC) does not favour oil prices at this level, it strongly believes that fundamentals are not supporting current higher prices and that the market is very well supplied," El- Badri said.
OPEC's own "basket" price of crude oil, based on production in 12 different countries, rose to a record 78.76 dollars a barrel Monday, the cartel calculated, up from the previous record of 77.46 dollars Friday.
Only the day before, OPEC had surprised analysts by keeping its estimate for world oil demand growth in 2007 unchanged, despite the latest price developments.
In New York, Alaron Trading analyst, Phil Flynn, said: "OPEC is living in a bit of denial by leaving its global oil demand outlook basically unchanged at 87.1 million barrels a day."
OPEC's argument was that rising Asian consumption would be offset by weakening demand from the US and Europe.
But "OPEC may get a surprise, especially if the weak dollar inspires more consumption in Europe," Flynn said.
OPEC believes that market speculation is to blame for sky- high oil prices.
Many of Iraq's largest oil fields are located in the north of the troubled country.
OPEC insisted it would "continue to strive" for a balanced market and a fair price that was favourable for both consumers and producers.
Meanwhile, Oil prices eased slightly in Asia today but remained above 87 dollars a barrel in a market worried over a potential Turkish incursion into northern Iraq.
New York's main oil futures contract, light sweet crude for delivery in November, was 18 cents lower in early morning trade at 87.43 dollars a barrel.
In US trading Tuesday, oil struck a record intra-day high of 88.20 dollars before dropping back to settle above 87 dollars for the first time, at 87.61 dollars a barrel. On Monday it jumped more than two dollars.
The price of Brent North Sea crude was not immediately available. In London trade Tuesday, Brent for November delivery advanced 1.41 dollars to settle at 84.16 dollars, after earlier hitting an all-time high of 84.49 during the session.
Oil prices surged as investors fixated on Turkey, where the parliament is expected to adopt a government motion Wednesday to allow cross- border operations against bases of the Kurdistan Workers Party (PKK) in Iraq.
OPEC chief Abdalla Salem El-Badri said in a statement that the Organisation of the Petroleum Exporting Countries "is carefully watching developments in the oil market and has observed with concern the recent escalation in oil prices."
"While (OPEC) does not favour oil prices at this level, it strongly believes that fundamentals are not supporting current higher prices and that the market is very well supplied," El- Badri said.
OPEC's own "basket" price of crude oil, based on production in 12 different countries, rose to a record 78.76 dollars a barrel Monday, the cartel calculated, up from the previous record of 77.46 dollars Friday.
Only the day before, OPEC had surprised analysts by keeping its estimate for world oil demand growth in 2007 unchanged, despite the latest price developments.
In New York, Alaron Trading analyst, Phil Flynn, said: "OPEC is living in a bit of denial by leaving its global oil demand outlook basically unchanged at 87.1 million barrels a day."
OPEC's argument was that rising Asian consumption would be offset by weakening demand from the US and Europe.
But "OPEC may get a surprise, especially if the weak dollar inspires more consumption in Europe," Flynn said.
OPEC believes that market speculation is to blame for sky- high oil prices.
Many of Iraq's largest oil fields are located in the north of the troubled country.
OPEC insisted it would "continue to strive" for a balanced market and a fair price that was favourable for both consumers and producers.
Meanwhile, Oil prices eased slightly in Asia today but remained above 87 dollars a barrel in a market worried over a potential Turkish incursion into northern Iraq.
New York's main oil futures contract, light sweet crude for delivery in November, was 18 cents lower in early morning trade at 87.43 dollars a barrel.
In US trading Tuesday, oil struck a record intra-day high of 88.20 dollars before dropping back to settle above 87 dollars for the first time, at 87.61 dollars a barrel. On Monday it jumped more than two dollars.
The price of Brent North Sea crude was not immediately available. In London trade Tuesday, Brent for November delivery advanced 1.41 dollars to settle at 84.16 dollars, after earlier hitting an all-time high of 84.49 during the session.
Oil prices surged as investors fixated on Turkey, where the parliament is expected to adopt a government motion Wednesday to allow cross- border operations against bases of the Kurdistan Workers Party (PKK) in Iraq.