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Page added on July 30, 2006

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Opec unable to influence crude markets any further

Opec and its stalwarts, including Saudi Oil Minister Ali al Naimi, have been stressing for considerable period of time now that there is plenty of oil in the market, and in the pipeline, and all talks of shortage and scarcity is wrong — and rubbish. And that more oil would not help deflate oil prices.

Now even the IEA sees eye to eye with Opec on the issue. Claude Mandil told reporters that the world did not need more oil (now) to moderate record prices. He also stressed the point the Opec stakeholders have been trying to drive home for some time now, that Opec alone was powerless to bring down oil prices without the easing of political tension in the Middle East and other global hot spots. “Nothing can moderate oil prices if there are no improvements in the political situation in the Middle East and all places where there is turmoil,” Mr Mandil was quoted as saying immediately after the G8 summit, in which the Lebanon crisis loomed large. And thus Mr Mandil very much doubted the ability of Opec, and its largest producer Saudi Arabia, to bring the prices down simply by pumping more oil to the market. That won’t work, he almost conceded.

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