Opec's expected no-change decision this week will mask debate over reserves rivalry and whether the group will next year adjust policy to accommodate new Iraqi supplies or add oil to calm a dollar-driven price rally. Ecuador's oil minister, holder of Opec's revolving presidency, on Wednesday told Reuters there was a consensus within the Organisation of the Petroleum Exporting Countries to keep policy unchanged at Thursday's policy-setting meeting.
"Yes, there is a consensus," Opec President Wilson Pastor said. Oil has stayed close to the $70-$80 range Saudi Arabian Oil Minister Ali al-Naimi says is ideal for producers needing to invest in more supplies and not so high it would jeopardise fragile economic recovery.
Pastor said that range could persist for a year, but not everyone is convinced. This month US crude hit a five-month high above $84 a dollar before easing slightly. Some analysts have seen the potential for a speculative rally as expectations the United States will resort to further economic stimulus drag down the US currency.
A weaker dollar makes dollar-denominated commodities relatively cheap and can fuel speculative buying. Price moderates, such as Saudi Arabia, which is keen to preserve long-term demand for its extensive reserves, would probably be uneasy if any rally were too rapid. But those who traditionally have sought a higher price have in the past argued a weaker dollar erodes the value of their petrodollars and justifies a higher oil price.
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