AFP: Iran, which chairs the oil producers’ cartel OPEC, said on Tuesday it expects global crude prices to further rise by the end of 2011 while the secretary-general urged wealthy G8 countries to cut fuel taxes.
By Farhad Pouladi
TEHRAN (AFP) — Iran, which chairs the oil producers’ cartel OPEC, said on Tuesday it expects global crude prices to further rise by the end of 2011 while the secretary-general urged wealthy G8 countries to cut fuel taxes.
“The price of oil depends on two things. First, the fundamentals, including supply and demand and then the political, psychological and unforseen elements. Based on these factors, oil prices should increase again by end of the year,” Iran’s representative to OPEC, Mohammad Ali Khatibi, told reporters in Tehran.
He said oil demand in 2011 will be high, between 1.3 million barrels per day to 1.6 mbpd.
“What is certain is that we will see a rise in demand,” he said.
On Monday, the secretary general of OPEC, Abdullah El-Badri had expressed concern over the high price of oil but added the market had adequate supplies of the commodity.
“We see that there is a 15-20 dollar premium risk at this time,” Badri told reporters in Kuwait.
On Tuesday, he was in Tehran for the 50th anniversary of the founding of OPEC, and reiterated that the market was adequately supplied with crude oil.
He said there was “no shortage” of oil in the market. “OPEC has said repeatedly there is no shortage of oil anywhere in the world and stocks are high,” El-Badri told reporters.
“OPEC has done its part to ensure that the market is adequately supplied with crude and it will be useful in this challenging time if consuming countries, who impose high taxes on oil, revise it temporarily because we are in an exceptional circumstance that needs exceptional solution.”
“We ask the governments of the G8, which have more taxes and are making more money from taxes than the producing nations from selling … we urge them to reduce the taxes,” El-Badri said.
“I think the market is comfortable and we (OPEC) already have 4.5 million barrels per day that we can send to market … (there is) no shortage in market and stocks are high,” he added.
El-Badri said that crude prices will remain above 100 dollars per barrel for the rest of the year when asked if prices would fall below that level.
Oil fell in Asian trade Tuesday after a bearish Standard and Poor’s report on the United States, but geopolitical risks in the Arab world will continue to drive prices higher, analysts said.
New York’s main contract, light sweet crude for delivery in May dipped 27 cents to 106.85 dollars a barrel, while Brent North Sea crude for June eased 35 cents to 121.26 dollars in the afternoon.