OPEC: $100 oil not due to supply
High-consuming oil countries have been putting the pressure on OPEC to pump more oil to prevent it surpassing $100 a barrel. But Stephen Beard tells Scott Jagow that OPEC blames the price hike on other factors.
Kuwait's acting oil minister Mohammad al-Olaim walks with Saudi oil minister Ali al-Nuaimi at Kuwait International Airport in Kuwait City. (Yasser Al-Zayyat/AFP/Getty Images)
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TEXT OF INTERVIEW
Scott Jagow: The price of oil has slid the past few days. It's at $94 a barrel this morning. But $100 oil could come any day.
Let's bring in our European correspondent, Stephen Beard. Stephen, I know OPEC had something to say this morning. What's their position at the moment?
Stephen Beard: Well, OPEC of course is coming out of intense pressure from consuming countries like the U.S. to pump more oil to prevent the price from going over that $100 a barrel level. But now, again, the Saudi oil minister and the president of OPEC have both just repeated the familiar mantra. They say there's plenty of oil around, market they say is well-supplied. The rise in price towards $100 has nothing to do with supply -- they say it's due to other factors.
Jagow: Is that mainly still the weakness of the dollar?
Beard: Yes. OPEC in particular says the dollar has lost a lot of value against other currencies. It's perfectly reasonable to expect it to buy less of key commodities like oil.
Jagow: But is there any evidence that OPEC is wrong here, that there actually is a tighter market for oil?
Beard: Yes. I mean, some of the analysts that I've been talking to say that evidence from the market and from various data around the planet indicate that actually, oil supplies are tight, and there are definite worries about winter demand. And they point to the fact that the price of crude fell pretty sharply yesterday, precisely because of expectations that in fact, OPEC will relent, and next month it will increase production.
Jagow: Well, I guess we'll find out more, Stephen, when OPEC meets next week. Thanks for joining us.
Beard: OK, Scott.
