{"id":171463,"date":"2010-01-12T13:10:14","date_gmt":"2010-01-12T18:10:14","guid":{"rendered":"http:\/\/blogs.wsj.com\/environmentalcapital\/2010\/01\/12\/oil-prices-is-opec-looking-for-100-crude\/"},"modified":"2010-01-12T13:10:14","modified_gmt":"2010-01-12T18:10:14","slug":"oil-prices-is-opec-looking-for-100-crude","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/171463","title":{"rendered":"Oil Prices: Is OPEC Looking for $100 Crude?"},"content":{"rendered":"

Crude may be taking a breather Tuesday, down about $1 a barrel, but some OPEC countries appear to be giving oil traders a-wink-and-a-nod for pushing crude prices higher.<\/p>\n

Earlier Tuesday, Kuwait’s Oil Minister Sheikh Ahmad Abdullah al-Sabah told reporters that $82 oil was “fantastic” and said the Gulf state doesn’t think OPEC needs to change production in March at its next policy meeting based on current prices. <\/p>\n

An official in Kuwait’s Supreme Petroleum Council then told Zawya-Dow Jones that OPEC “will not consider it an alarming event even if oil hits $100…” Last week, Libya\u0092s top oil official, Shokri Ghanem, said, “As long as (oil prices) are under $100 there is no need for (OPEC) action.”<\/p>\n

For months, the 12-nation cartel has repeated like a mantra its comfort with crude oil prices between $70 and $80 a barrel. That\u0092s a relatively tolerable level for consumers, and certainly cheery for OPEC states, whose drilling costs are a tiny fraction of today’s $81 oil price in New York. <\/p>\n

Olivier Jakob, an analyst with Swiss-based Petromatrix, thinks the recent the recent OPEC chatter is basically talking up prices. “While OPEC will blame higher oil prices on speculators, they are trying to sponsor the same speculation by making the rounds saying that OPEC will not move a finger unless [West Texas Intermediate] rises above $100 a barrel,” Mr. Jakob said in a research note Tuesday, referring to the U.S. oil-price benchmark.<\/p>\n

Moderate voices within OPEC–such as Saudi Arabia, which holds most of OPEC’s spare production capacity–recoil at suggestions that OPEC wants higher prices and say they’re genuinely pleased with prices hovering between $70 and $80. <\/p>\n

At that level, OPEC crude is still the best game in town compared with many of the high-cost oil-drilling projects in non-OPEC states, like Canada, that usually require a sustained oil price of at least $75 to be profitable. <\/p>\n

And consumers will still fill up their vehicles at $75 crude; when crude hits $100, that equation changes substantially<\/a>, as seen in 2008, when high prices at the pump poleaxed demand for oil. Remember: OPEC worries about \u0093security of demand\u0094 the same way Western countries worry about security of supplies.<\/p>\n

The problem for OPEC: The group’s more moderate voices usually don’t talk down the more hawkish OPEC elements, at least publicly. That leaves the impression to most outside observers that OPEC as a group is bent on squeezing consumers.<\/p>\n

The big unknown is at what point OPEC will formally start to use some of its substantial overhang in spare oil-production capacity after keeping its production target unchanged since Dec 2008. <\/p>\n

Saudi Arabia has around 4.5 million barrels a day of idle capacity–more than the total pumping capacity of OPEC’s No 2. producer, Iran–and some oil analysts think the kingdom will be reluctant to see oil prices move far above $80 a barrel over a sustained period.<\/p>\n

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Crude may be taking a breather Tuesday, down about $1 a barrel, but some OPEC countries appear to be giving oil traders a-wink-and-a-nod for pushing crude prices higher. Earlier Tuesday, Kuwait’s Oil Minister Sheikh Ahmad Abdullah al-Sabah told reporters that $82 oil was “fantastic” and said the Gulf state doesn’t think OPEC needs to change […]<\/p>\n","protected":false},"author":4774,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-171463","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/171463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4774"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=171463"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/171463\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=171463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=171463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=171463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}