Azerbaijan, Baku, 30 July/ Trend , corr A. Badalova/ The oil prices dropped to their all time low since May 2008. The prices of the US light oil in New YorkMercantileExchange dropped by $2.54 and totaled to $122.49 a barrel and Brent oil dropped by $3.13 and made up $122.71 a barrel in London.
The analysts say the prices dropped sharply only for the time being given the unstable situation around Iran and expected further weakening in the US dollar. The representative of Iran in OPEC Mohammad Ali Khatibi said last week that the oil prices can reach $500 a barrel in case of aggravation of the political situation in Iran and weakening of dollar.
"If the region comes to the brink of war, the oil supply not only from Iran, but also from the region as a whole will be stopped as 40% of the world oil export is carried out through the Strait of Hormuz," Khatibi said.
The president of OPEC Shakib Khalil said descending pressure on Iran would enable a drop in oil prices to $70-$80 a barrel worlwide.
Iran is the second oil producer in OPEC. In June, the oil output of Iran totaled to 3.85mln barrels a day.
According to the Director of the Energy Department of Bruno Leoni Institute of Italy Carlo Stagnaro, both the expectation for a weak dollar in the future and the threats of a war against Iran contribute to keeping oil prices well above the levels that one would expect given the fundamentals.
"I don't think in the foreseeable future oil can skyrocket at US$ 500 per barrel," Stagnaro said to Trend by e-mail.
Stagnaro attributed the skyrocketing of prices to the immediate reaction of the demand to the oil prices.
"We are already having signs of demand reductions as a consequence ofcurrent price, and if they should increase even more the reaction on the demand side would be even more visible, leading to lower prices," Stagnaro said.
According to the forecast of the Energy Information Administration of US, the rise in the world oil demand will make up 1.4mln barrels a day by 2009. The rise in the world oil demand will drop by 1.2mln barrels a day in the second half of 2008.
"If it will become clear that no Iranian war will happen, and if no major disruptions occur, I expect oil prices to decrease as a consequence of both reactions on the demand side and new investments on the supply side coming on stream," Stagnaro said.
The analyst of EIA Neil Gamson said to Trend by e-mail that the all time high oil prices will be take places in the last quarter of 2008 at $145 per barrel.
According to EIA forecast, the average price of WTI will make up $132.75 a barrel by 2009.
According to Gamson, average annual rise in world oil price case through the year 2030, where the price of crude oil increases by an average of 2.5%.
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