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International Oil Prices will Remain High in the Near Future
As world oil prices rise again, OPEC says it will maintain current oil production levels. OPEC is willing to increase oil production if necessary.On Monday, world oil prices rose again. In London trading, the price of U.S. light, sweet crude oil for May delivery rose 48 cents to $64.11 a barrel. Brent crude futures also rose 48 cents to $69.11. Oil prices were also choppy in New York trading Monday.
Faced with higher oil prices and further intensified oil market volatility, OPEC Chairman Mohammed Hamili believes that the current oil supply is sufficient. However, he also said: "If the market needs more oil, we stand ready to provide it."
OPEC members agreed to maintain production cuts of 1.7 million barrels per day that began late last year. However, international oil prices have risen sharply since then, with Brent crude oil rising by US$10 per barrel and now approaching US$70 per barrel, far higher than OPEC's stated target price of US$60 per barrel.
Oil consuming countries and the International Energy Agency have recently called on OPEC to increase oil production. The International Energy Agency warned last week that oil inventories could fall further if OPEC maintains current production levels.
However, the Financial Times reported that OPEC has softened its previous stance because Saudi Arabia, OPEC's main member, wants to maintain friendly relations with its largest customer, the United States. King Abdullah of Saudi Arabia recently said in a speech at the annual advisory meeting that Saudi Arabia is aware of its international responsibilities and is working hard to create fair prices that take into account the interests of both oil-producing countries and oil-consuming countries.
Another OPEC member, the United Arab Emirates, has resisted the current trend among some OPEC countries to ban foreign investment in the oil industry, attracting bids from the world's largest international oil companies to develop a $10 billion natural gas project.
However, according to Reuters, OPEC arrogantly rejected calls from relevant parties to expand oil production. Dr. Luft, executive director of the Institute for Global Security Analysis, a think tank in Washington, said that OPEC should expand oil production and that OPEC's decision did not take into account the interests of oil-consuming countries.
Crude oil prices have risen 5% last week due to an unexpected drop in U.S. gasoline inventories and problems at several U.S. refineries. In addition, the weather in the northeastern United States has suddenly turned cold recently, and rare snowfall occurred in April, which has also contributed to the rise in oil prices.
Dr. Luft said that the tense relationship between Iran and the international community is another reason for the rise in oil prices. “Looking at the overall picture, there is something wrong with the fundamentals. There is not enough product, and oil-producing countries should expand their production capacity, but oil production capacity is declining. The election in the African country Nigeria is also tense. All of this creates It became a disturbing atmosphere.”
Nigeria, the world's eighth-largest oil exporter, will hold a presidential election on Saturday. With 21 people killed in election-related violence in Nigeria last week, there are fears the outcome could lead to more violence that could disrupt the country's oil supplies. Nigeria is an important oil supplier to the United States.
Summer is the peak time for driving travel in the United States. Analysts believe U.S. oil demand will continue to grow ahead of summer. However, several U.S. refineries will restart gasoline production this week, which should increase U.S. gasoline inventories and exert a certain restraint on gasoline prices.
However, Dr. Luft believes that given various factors, it is unlikely that world oil prices will fall in the coming months.
