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Raise oil prices, OPEC takes no action

Energy prices continued to rise May 27 with crude topping $ 63/bbl before the decision of the Ministers of the Organization of Petroleum Exporting Countries not to change production quotas at its meeting on May 28 in Vienna.

OPEC's inaction was expected, but helped blow crude above $ 64/bbl in intraday trading on the New York market. The group noted that recent indicators of the global recession of fund in May this year. But they also noted large inventories of oil, weak industrial production, and high unemployment still exist. Production ceiling of OPEC is 24.85 million bpd for 11 members other than Iraq. Although compliance remains relatively strong, OPEC members have not yet fully implemented the 4.2 million b / d agreed that the reduction last year.
"Some of the traditional 'hawks' have been asked to [another] court, either at this meeting or in the future," said analysts from the Houston office of Raymond James & Associates Inc. Given the weakness of the foundations, obviously, even Saudi Arabia Oil Minister [Ali al-Naimi] considers that the increase in oil prices is a function of optimism that the worst of the recession is behind us, they said.
Likely increase in oil prices were a factor in the decision of the group. The average price of OPEC basket of 12 reference crudes fell by $ 2.04 to $ 60.75/bbl on May 27.

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Saudi Arabia's oil minister expects oil prices to rise to $75 a barrel this year

Speaking in Vienna on Thursday before the meeting of oil cartel OPEC, Ali al-Naimi also said that there was no need to reduce oil production in the last round of talks, as the cuts that began on last year are now having an effect. He urged members of OPEC, which produces around 40pc of the world's oil reserves, to "stay the course."
OPEC has reduced its production quotas three times since September in a bid to stabilize oil prices, which fell from highs in excess of $ 147 per barrel in July last year to about $ 32 in December.
However, Mr. al-Naimi also said that profits were "not only critical," indicating that at least part of the recent increase could be attributed to an influx of speculative money betting on an economic recovery. "The price increase is a function of optimism best things come in the future," said Mr al-Naimi. Global oil inventories remain near a record.
In an interview published Wednesday in the Kuwaiti newspaper Al-Seyassah, King Abdullah of Saudi Arabia also said that the kingdom believes a fair price is $ 75 or maybe $ 80 a barrel, especially at this time. "
One of the major players in the Middle East oil privately told The Daily Telegraph last week that it expected inflation to return with a vengeance and oil prices could, once again, the violation of $ 100 per barrel level next year. The price of London Brent crude rose before the reunion, after hitting a six-month high the previous session.

Saudi official warns of possible further hike in oil prices

The world could cope within "two to three years" another spike in oil prices similar to that observed in 2008, Oil Minister of Saudi Arabia Ali al-Naimi said on Monday. Al-Naimi said a meeting of Group of Eight ministers in Rome that the high price scenario was likely unless the investment in new capacity expansion are made. "
The Oil Minister of Saudi Arabia, the world's top oil exporter, made the remarks in a speech during an afternoon session at the Rome meeting on Energy Security and Investment for Sustainable Development.
He said once the world recovers from the current economic crisis, "the combination of a growing world population and the desire Pent prosperity of developing economies, growth willdrive the need for energy supply in coming decades" .
Despite efforts to find alternative energy sources, many of them still depend on fossil fuels, said Al-Naimi.
The Rome meeting of two days ending on Monday is to bring together representatives of G8-United States, Japan, Germany, France, United Kingdom, Italy, Canada and Russia.
Monday was also attended by energy officials are emerging economies such as Brazil, China, Egypt, India, Saudi Arabia and South Africa.
Monday preceding the meeting participants said a senior official of the International Monetary Fund that the recent rise in oil prices signal the feeling that the longer period of global economic decline is over. "
Oil prices in recent weeks have risen to about $ 60 a barrel "which reflects an overall improvement, including the growth of China" can pick up, "IMF First Deputy Managing Director John Lipsky said.
He said the price rise was built "on expectations that the contraction in oil demand in May down very soon."
Lipsky urged policymakers to find ways to reduce the volatility of oil prices and their impact on the global economy.
"The rapid evolution of oil prices are bad for global growth and the global economy and financial stability," he said. Policy makers must "address the major factors behind the large swings in oil prices."
The need to safeguard global energy security, as a tool to promote global economic recovery has reached the Rome meeting on the agenda, along with discussions onnew clean technologies to improve energy efficiency and reduce greenhouse gas emissions greenhouse.
On Sunday, participants heard estimates of the International Energy Agency (IEA) estimates that global electricity consumption is expected to contract by 3.5 percent in 2008, the first decrease since records began after the Second World War.

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Warning of new oil price crisis

While short-term oil prices is unlikely to go above $ 75, even the most optimistic expectations, limited investment in new projects could see the oil price increase, even over last year's high Some of the experts agree.
Over the weekend, Saudi Arabia oil minister Ali al-Naimi told delegates at a meeting in Rome that the world could be facing another oil crisis, with prices above the lap record of almost $ 150 a barrel within two to three years.
The comments recall the prediction of Goldman Sachs in May that oil could head to $ 200 in November last year.
The International Energy Agency recently predicted spending on oil exploration and future production will be reduced by up to 20% this year - double the decline that had been forecast.
Faced with declining oil prices and difficult credit markets, it is feared that the lost production this year could take years to do well.
The comments of the Saudi oil minister echoed by the International Monetary Fund, with commentators warning lowest prices and the global recession are hindering investment in new capacity.
All this makes the decision of OPEC later this week on production doubly important. Member countries say they are doing everything possible to get the oil price back to its level of $ 70 per barrel - which represented both say that their needs as the producer countries and the needs of the global economy.
But with the production forecasts for the global economy fears still seesawing between any recovery will be slow and some reasons for optimism that next year will be a return to growth, forecasts of future demand are as difficult as ever right.
Lipsky, IMF first deputy managing director, told a meeting of G8 energy ministers that "over the short term are likely to decline."
"Global demand for oil is expected to recover gradually, reflecting the prospect of a gradual recovery in global growth and excess capacity in OPEC producers has increased considerably," he said.
Jon Rigby, an analyst at UBS, said that the recent increase in oil price reflects market sentiment increasingly optimistic, not any change in fundamentals.
But agreed that current levels of oil prices are still in the range between the necessary level of support for existing production and is required to drive sufficient investment to increase productive capacity. "
Ultimately, he believes prices will move more steadily, although it was not until about the second half of 2010, when inventories have fallen and the reserve capacity begins to erode.
"The first quarter saw the bottom in oil prices, amid the worst two quarters of economic activity in modern history, then this is probably a very bullish long term signal," he adds.
Like others, we think short-term fundamentals are weak, with reserves capable of meeting the demand of about 62 days - well above the normal level of 52-54 days and think that lower prices in the short term - although probably not less than $ 40.
Naimi said the downbeat forecasts from some major agencies are too cautious and expects oil to rise to $ 75 a year.
Many analysts believe the petroleum oil in an average of $ 70-75 next year and an increasingly concerned that oil prices can go forward as the bears suggest that the global recovery - and hence the demand for oil - will be slow.
The bulls, however, think the fall in supply will not meet the recovery of demand and oil prices could surge.
This is why OPEC, Naimi urged to "stay the course" when it meets this week, despite the growing evidence that members are not complying to the lower production targets that were set in January.

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Local gas prices up as holiday weekend begins

Just in time for the holiday weekend, gas prices are rising again. One expert believes that the University of Purdue fuel was higher than the $ 3 per gallon.
As we prepare to fill in and press the way for the weekend of Memorial Day, you see that gas prices have jumped 3 cents overnight. However, oil prices have been steady this week holding near $ 62 a barrel. OPEC meets on May 28 to decide whether oil production cut. The poster said that the president wants the oil at $ 70 per barrel.
The national average today is $ 2.39. In Florida the average is $ 2.40. Palm Beach is $ 2.46
Refineries are becoming less oil with the gas to millions of persons in the conduct of the recession. That is one reason there is a price difference between oil and gas. The gas is 32.9 cents per gallon higher than last month but is still $ 1.44 per gallon cheaper than a year ago, when fears of an oil shortage sent soaring energy prices.