PARIS: The president of OPEC, Algerian Energy Minister Chakib Khelil, forecast yesterday that oil prices could rise to $150 to $170 a barrel during the Northern Hemisphere summer.
If there were real demand for extra oil, the Organization of Petroleum Exporting Countries would do what is needed to satisfy it, he said, affirming that there was enough oil in the world for about the next 50 years.
“I predict probably prices of 150 to 170 dollars this summer. It (the market) will probably fall a bit toward the end of the year,” he said in an interview with the France 24 television channel.
Khelil said he did not expect prices to hit $200 a barrel, barring a major market crisis such as a halt in production in Iran.
In that case, he added, prices could possibly surge to “200, 300, 400 dollars.”
In the short term, he said: “Everything depends on the European Central Bank and a decision it could take to raise Euro zone interest rates. At that time, I think the price of oil will increase.”
ECB policymakers are to meet July 3 when many analysts predict they will decide to raise their benchmark rate by a quarter of a point to 4.25 percent in the face of rising inflationary pressure.
A strong euro, and a weaker dollar, would drive up demand for oil, which is marketed in the US unit and becomes cheaper for holders of nondollar currencies.
Khelil also cited “threats against Iran,” where US and European officials suspect that authorities may be trying to develop nuclear power for military purposes.
“If they (threats) increase, I think the price of oil will rise further this summer as it would coincide with stronger demand for gasoline (petrol), particularly in the United States.” If a crisis halted production, in Iran, for example, a serious situation would result because no other country could replace Iranian output, he said.
Crude futures rose sharply after Khelil’s remark. The prices also jumped after Libya said it may cut production.
Light, sweet crude for August delivery rose as high as $138.95 a barrel shortly after the New York Mercantile Exchange opened before retreating some to trade up $2.50 at $137.05.
The head of Libya’s national oil company said the country might cut crude production because the oil market is well supplied, according to news reports.
