Oil prices to stand at $60-$80 per barrel by late 2009: American expert

Business Materials 2 September 2009 13:37 (UTC +04:00)
Oil prices to stand at $60-$80 per barrel by late 2009: American expert

Azerbaijan, Baku, Sept. 1 / Trend , A.Badalova/

Oil prices on the world markets will stand at $60-$80 per barrel by late 2009.

"Oil prices will continue to trade in their current range through the end of the year, between $60 and $80," the Oil Markets Department of the U.S. Energy Security Analysis (ESAI) company, Rick Mueller wrote to Trend in an email on Sept. 1.

Oil prices on the world markets have dropped sharply by almost four percent, and the first time in four and a half weeks, it stood at below $70 per barrel. As a result of trading on Aug. 31, on the New York Stock Exchange, price of WTI crude for October delivery fell $2.78 and was $69.96 per barrel. On the London Stock Exchange, the October contract for Brent fell by $3.14 and was $69.65 per barrel.

The oil prices in the near term will mostly be determined by the level of the economic recovery which is just as difficult to forecast, believes Todd Wynn, the U.S. Cascade Policy Institute's Energy Policy Analyst.

Mueller believes OPEC will leave quotas unchanged, along with some gentle exhortations for certain members (Iran) that are overproducing.

The oil prices are trading in a range that's comfortable for OPEC, Mueller believes.

"The Saudi Arabia has announced that they feel a price near $75 is 'fair'," Mueller said. However, the American analyst believes the members of the cartel do not want a price spike that could choke off the economic recovery, but they also want to protect their revenue.

Wynn believes OPEC will continuously try to maximize profits as all cartels do.

"OPEC will weigh whether restricting supply and thus increasing price will lead to greater profit potential. If world markets are very responsive to price increases, demand could fall which could lead to declines in profits. OPEC, if analyzing the market properly, will assess price elasticity and make economic decisions based on proper data," Wynn said.

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