Opec Head Sees
Oil Price Hitting $200 a Barrel
RUSSELL HOTTEN / The Telegraph (UK) 29apr2008
The president of Opec has warned that the price of oil could hit $200 (£100) a barrel, spelling more pain for the major crude-consuming economies.
Chakib Khelil said there was nothing that the oil producers' cartel could do to bring down the high price, which he blamed on geopolitical tensions and market speculators.
His comments, coming as oil touched a record $120 a barrel on Nymex at one stage yesterday, are seen as rejecting pleas from America and Europe for Opec to turn on the taps and help rein in the price. Mr Khelil, Algeria's energy minister, said there is no evidence of a shortage of oil on world markets.
He told El Moudjahid, Algeria's state-owned newspaper, that oil stocks in the US were at a five-year high.
The price is being pushed up by the weak dollar, investment funds speculating on a higher price, and fears over supply shortages created by events such as the Grangemouth strike in Scotland and another at ExxonMobil's operations in Nigeria.
In such circumstances, Mr Khelil said he could not rule out oil going to $200 a barrel.
While the power of Opec, which supplies about 35pc of the world's needs, is no longer as great as in the 1980s and 1990s, critics within the US government argue that its members could do more to increase supply.
The rising price of crude is not hurting the oil companies, however. Royal Dutch Shell is today expected to report record first-quarter profits, while BP should turn in one of its best quarterly performances for two years.
During the quarter being reported, oil reached $100 for the first time. Shell's Q3 profits are forecast to rise 5pc to around $6.88bn, with BP's rising about 32pc to $5.26bn. Profits from refinery operations will fall, however, as the cost of crude oil rises.
In February, BP estimated that output will rise 13pc during the next five years to about 4.3m barrels a day. Tony Hayward, the chief executive, said BP will sustain production of at least 4m barrels a day until 2020 even without new finds.
Oil prices came off their day highs, with Brent trading just 30 cents higher in late trading at $116.64, and Nymex 36 cents higher at $118.88.