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Page added on June 27, 2009

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Reactive oil markets won't wait

HONG KONG

It looks very much as if the market is ahead of Saudi Arabian oil minister Ali al-Naimi and the oil-exporting countries that say $80 a barrel oil will be here as soon as the global economy gathers steam, probably by yearend in their view. To maintain prices, the Organization of Petroleum Exporting Countries is trying to police cutbacks of 4.2 million barrels a day from OPEC’s combined output. For OPEC members with ambitious economic or social programs, $60 a barrel oil is a break-even point for their constrained budgets.

But so-called oil experts are totally split on rising oil prices. The head of U.S. oil giant Exxon Rex Tillerson says he sees no justification for such high prices. “It’s just a bet as to whether the green shoots have roots or not, and none of us really know yet,” he said. American analysts say oil at $80 is the maximum that Americans can pay without their economy tipping back to recession.

Japan Times



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