Oil producers reject raising output
Monday, April 21, 2008
Full Article Here!
(http://www.channelnewsasia.com/stories/afp_world_business/view/342577/1/.html)
1. Increasing Demand for Oil-related products + Scarcity / Factors leading to scarcity such as political unrest, with Oil being a finite resource
'Oil prices hit record highs above 117 dollars per barrel in New York, following a pipeline attack in Africa's biggest producer Nigeria.
Kuwait's acting oil minister said on Sunday that supply and demand factors are not to blame for the soaring price of crude oil, which reached fresh highs last week.
Oil prices hit record highs above 117 dollars per barrel in New York, following a pipeline attack in Africa's biggest producer Nigeria.'
2. OPEC nations still account for two-thirds of the world's oil reserves, and, as of March 2008, 35.6% of the world's oil production, affording them considerable control over the global market.
'Oil-producing countries have rejected calls to raise output amid record prices - five times higher in as many years - saying the rise in demand was artificial.'
'"The level of stockpiles does not currently affect prices on the world market," Mohammad al-Olaim said on the sidelines of an energy forum in Rome attended by oil-producing countries, companies and consumer nations.'
3. OPEC has the aim of ensuring the stabilization of prices / Cartel members may agree on such matters as price fixing, total industry output, market shares, etc.
'Organisation of the Petroleum Exporting Countries (OPEC) president Chakib Khelil, currently touring Kuwait, echoed him, saying there was no need for an immediate hike in production.'
4. Effect of inflation/deflation (US dollar)
'Khelil, on his part, said the falling value of the US dollar was responsible for the surge in oil prices. "When the dollar loses one percent, the price of a barrel of oil rises by four dollars," he said.'
[FYI]
'The next largest group of producers, members of the OECD and the Post-Soviet states produced only 23.8% and 14.8%, respectively, of the world's total oil production. As early as 2003, concerns that OPEC members had little excess pumping capacity sparked speculation that their influence on crude oil prices would begin to slip.'
(http://en.wikipedia.org/wiki/OPEC)
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