Oil price balancing act
Oil-consuming countries want OPEC to put more oil on the market to drive down prices. OPEC really has no interest in that and is quick to point out that refinery constraints in places like the U.S. are the real stopgap. Gretchen Wilson fills us in.
OPEC headquarters in Vienna (Joe Klamar, AFP/Getty Images)
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TEXT OF INTERVIEW
Scott Jagow: We've haven't talked much about oil prices lately. They're still above $70 a barrel. The International Energy Agency wants OPEC to put more oil on the market and drive down the price. OPEC is resisting. Reporter Gretchen Wilson joins us from South Africa. The head of OPEC has been visiting its newest member, Angola. Gretchen, why is OPEC against more production?
Gretchen Wilson: OPEC doesn't want to increase production because it doesn't want to have a lot of stocks of crude oil on hand, because if the world economy is going to slow down, perhaps fueled by this subprime crisis, it doesn't want to have all this excess stock, too much supply thereby driving prices way down. OPEC of course wants to benefit from reasonable prices of oil so they're actually resisting that pressure by the IEA to increase production.
Jagow: And the oil consuming countries though, they obviously want a cheaper price of oil. Is there a place in the middle the two can meet?
Wilson: I think it's a delicate balancing act. I think both organizations are really kind of putting pressure on one another while at the same time realizing that the other side actually does have a point.
Jagow: And what OPEC is saying is that there's not a shortage of oil . . .?
Wilson: OPEC is saying that in fact it's not a problem of getting crude out of the ground, it's actually saying that refining that crude is the problem and it says it's actually the outages in the American refinery industry that are affecting the market.
Jagow: We haven't talked about oil much lately, mainly because gas prices are actually going lower so people aren't that worried about it.
Wilson: Absolutely I think it has been quiet and I think that there are still a lot of people who are kind of watching this very carefully and looking to the Sept. 11 meeting in Vienna as well as this meeting of oil ministers in Abu Dhabi on Dec. 5 to see which way prices on crude are gonna go.
Jagow: All right Gretchen Wilson in Johannesburg, thanks for joining us.
Wilson: Thank you so much.
