…Organisation to look for “elusive fair price”
10 August 2016, Sweetcrude, Abuja – The new Secretary-General of the Organisation of Oil Exporting Countries, OPEC, Dr. Mohammed Barkindo has noted that oil’s climb above $100 per barrel before prices crashed in 2014 was driven by “abnormal” conditions that could not last.
Writing in OPEC’s monthly Bulletin, Barkindo said the “skyrocketing of prices” that pushed crude as high as $147 in 2008 was “unsustainable” and probably harmful to the global economy.
He said OPEC would continue to work with other oil producers and consumers to find the commodity’s “elusive fair price,” he said.
Oil surged above $100 as climbing demand, political risks to supply and a weakening dollar lured speculators to bet on ever-rising prices. After slumping in the financial crisis of 2008, prices recovered to trade near $100 until summer 2014, when a glut caused by booming US shale supply sent prices crashing again.
The OPEC Secretary, who assumed the role of Secretary-General on August 1, added that recent rebound in the number of drilling rigs in use in the US is unlikely to “translate into additional volumes” of crude or “negatively impact on prices.”
Oil prices rose nearly 3 percent with US crude advancing firmly above the $40-per-barrel mark on short-covering and after a modest stockpile drop at the delivery hub for US crude futures. It was a second straight day of gains for crude futures from April lows.
Brent crude settled up $1.19, or 2.8 percent, at $44.29 a barrel. US West Texas Intermediate (WTI) crude rose $1.10, or 2.7 percent, to settle at $41.93 per barrel.