And this is exactly what happened when the minister referred to the necessity of keeping the crude market prices below $90 (and not $80). Some reports suggested the minister’s comment meant the OPEC kingpin had changed its position by agreeing to a shift in its preferred upward crude price bar.

Al-Naimi was responding to questions from the Financial Times at a dinner hosted by the Singapore International Energy Week earlier this month.

While responding, the minister said: “If the price were to go significantly below $70 per barrel, I do not believe that renewable would be competitive with fossil fuels. And so the (producing) countries are quite satisfied that it is above $70 but hopefully less than $90.”

This reference to $90 was enough to create furor. The mention of $90 was tantamount to showing the proverbial red cape to the market bulls. Many took it as a cue that Saudi Arabia was finally giving in to the pressure of the OPEC hawks and conceding to take the upper limit of the target price up further. Others felt Riyadh was under budgetary pressures and hence wanted crude revenues to go still higher. Some took this as a warning bell, an indication of the things to come.

Indeed, the recession that engulfed the world in 2008 encouraged OPEC to exceed budgeted spending. Buoyed by high oil revenues, the Kingdom too overspent its plan by 26 percent last year, posting a deficit of 6.2 percent of GDP, or nearly double its original plan. The ramped-up spending helped the crude-reliant Saudi economy to sail through the global crisis, launching a $400-billion five-year plan in 2008, the largest stimulus relative to gross domestic product among the 20 leading nations. Last month, Finance Minister Ibrahim Al-Assaf said the country expects to spend more than initially budgeted for 2010.

This jump in spending raised the budget break-even oil price by nearly $40 between 2006 and 2010, the Banque Saudi Fransi estimated, with $70 a barrel seen as a comfortable level.

Others began to look into the possible dollar connection to the desire to take the price bar still higher. As oil is priced in dollars, a weakening of the currency reduces revenues for non-US producers and also contributes to a perception that oil prices have scope to rise.

“I do not think it has a budget connection. The dollar's weakness is the most significant factor,” said Andrew Gilmour, senior economist at Samba Financial Group in London. “I do not believe that Saudi Arabia needs higher oil prices. However, the falling dollar is becoming a concern,” said Khan Zahid, chief economist at Riyad Capital.

The dollar, which is moving near its softest levels against the euro since the end of January, is expected to stay weak as the course of US and European monetary policies diverges.

The price issue also indicated the continued struggle between the hawks and the doves in OPEC. Libya openly argued that oil producers would be increasingly comfortable with crude prices of $100 a barrel because higher food prices and a weaker dollar are eroding their income.

“Now the price will be more comfortable for the producers if it is around $100,” Shokri Ghanem, chairman of Libya's National Oil Corporation, told Reuters. “The dollar is down and the prices of other commodities are up.”

Qatar also seemed to have endorsed the calls of a higher price bar. Iran and Venezuela, faced with large budgetary deficits, have traditionally insisted on the need to take market prices still higher. All this added to the confusion in the market.

Comments by Saudi Arabia — endorsed by Qatar — indicated OPEC ministers are preparing the market for a rise to $100 next year, said Dalton Garis, an associate professor of economics at the Petroleum Institute in Abu Dhabi.

“They are testing the water so that the market doesn't react badly when they increase prices next year,” said Garis, who forecast oil prices to reach $110 by the end of next year. “It is very carefully scripted.”

But the actual situation appears different. Saudi Arabia is still content with and committed to the $70-to-$80 price band. An unnamed senior Saudi official clarified the entire situation.

“Saudi Arabia has not shifted its preferred oil price range upward to $70-$90/barrel as was reported earlier and remains committed to a price range of $70-$80/barrel,” the senior Saudi source told the Reuters. “Saudi policy is still the same, $70-$80 per barrel.”

The source added that comments by Al-Naimi earlier were misinterpreted. This was unusual, for Riyadh is rarely in the business of giving clarifications. Yet given the enormity of the situation, it couldn't keep quiet.

The UAE is also stuck to its position that oil prices close to $70 a barrel are ideal for consumers and producers. OPEC was comfortable with the oil price “hovering between $75 and $82” a barrel, Mohammed Al-Hamli, the UAE Minister of Energy, underlined recently.

“We in OPEC are satisfied with prices at the moment … I think a price of $70 a barrel is very fair for producers and for consumers as well. Seventy dollars is fair for both the producers and consumers,” Al-Hamli said on the sidelines of the ADIPEC oil and gas conference in the capital.

For the time being the preferred price band remains $70-to-$80 per barrel. Yet the guessing game is on — and one really can’t help it cool down.