Future trend of oil prices lies in ambiguity, OPEC head stresses need for multilateral approach to energy crisis

Editorial Note: The following news reports are summaries from original sources. They may also include corrections of Arabic names and political terminology. Comments are in parentheses.

Future trend of oil prices lies in ambiguity

www.chinaview.cn 2008-06-14 05:12:30

VIENNA, June 13 (Xinhua) --

The Organization of Petroleum Exporting Countries (OPEC) released Friday its monthly report and pointed out that the supply and demand in the oil market was in balance.

However, since 2003, the oil prices have risen over four times higher. Alone in 2008, the prices have risen 40 percent. It even topped a historic high of 130.87 U. S. dollars per barrel on June 9.

OPEC member country Saudi Arabia therefore called earlier this week an emergency summit in Jeddah on June 22 to address the soaring prices. Whether this emergency meeting could efficiently curb the soaring prices remains a question.

SUPPLY AND DEMAND: BALANCE OR IMBALANCE

OPEC President, also Algerian Oil Minister Chakib Khelil announced Thursday again of no output increase of OPEC, saying "supply is more than enough." He estimated also a spare daily average output of 0.5 million barrels and therefore repeatedly emphasized that the supply and demand in the market was in balance.

Khelil said earlier on June 9 while addressing the workshop on Energy Poverty in Africa: that "OPEC spare capacity has been on the rise" and pointed out that the oil prices "have been vulnerable to factors other than market fundamentals."

OPEC wrote also in its monthly report that the oil market volatility was dominated mainly by speculative pressure, fluctuations in the U.S. dollars and geopolitical concerns.

Holding the opposite opinions, during the same period, the United States and Britain called for more oil output of OPEC, saying that the prices were going higher due to a supply shortage in the market.

GEOPOLITICAL CRISIS AGAIN CAUSED DEEP CONCERN ON THE OIL SUPPLY

Along with the speculations and weak dollars, the geopolitical crisis turned out to be more striking these days.

Israeli Deputy Prime Minister Shaul Mofaz declared on June 6 of possible attack on Iran's nuclear facilities and U.S. President George W. Bush admitted one day later the possibility of a military attack on Iran.

As the fourth largest oil producer in the world, also one of the most important OPEC member countries, Iran's possible fate of being attacked have caused serious concern on the OPEC's future oil supply.

This concern also attracted large amount of speculation money and pushed the oil prices over 130 dollars a barrel.

Meanwhile, port workers in France held a strike to disrupt petroleum shipments and outages in West Africa also gave the market reasons to boost the oil prices.

WEAK DOLLARS AND SPECULATIONS REMAIN POWERFUL BOOSTERS

Statistics showed that the oil prices have risen from 30 dollars to over 130 dollars since the beginning of 2004, 4.3 times higher than before. However, if it is converted into euro-based prices, which is from 30 euros to 80 euros, only 2.7 times more expensive.

This situation tremendously stimulated the speculations in the oil market. Comparing with the situation of 50 billion speculation money at the beginning of 2004, the speculation sum has risen to 250 billion euros so far.

OPEC head stresses need for multilateral approach to energy crisis

www.chinaview.cn 2008-06-13 05:43:36

LAGOS, June 12 (Xinhua) --

The Director General of The Organization of the Petroleum Exporting Countries (OPEC) Suleiman Al-Herbish, Wednesday stressed the need to strengthen multi-country common vision and strategies on energy issues, according to the official News Agency of Nigeria on Thursday.

Al-Herbish made the suggestion on Wednesday in Abuja while briefing reporters on the outcome of a two-day workshop organized by OPEC Fund for International Development (OFID) on ''Energy Poverty in Africa."

He attributed the poor and unstable power in the continent to lack of political will, wars and conflicts.

He blamed the situation on poor pricing policies, energy trade rules, cross-border risks, regional integration an unattractive atmosphere for private business development.

Al-Herbish was quoted as saying the need to develop large-scale trans-border projects such as high voltage lines, pipelines and hydropower in multinational basins had become necessary to address the energy problems.

"Power is capital intensiveness and the power sector requires that both the public and the private sector should be involved.

"The private sector is part of the solution with a public sector taking the initiative and the lead by developing an enabling environment based on continuous policies," he said.

He added that there was need to improve efficiency and the governance of the state-owned power utilities by appropriate investments and capacity building in order to avoid economic burden.

Editor: Mu Xuequan