Is there OPEC's blame in situation on oil market?

Oil&Gas Materials 15 July 2009 19:31 (UTC +04:00)

Azerbaijan, Baku, July 15 / Trend A. Badalova /

Oil prices on the world markets dropped more than 14 percent from $70 to $60 per barrel within two weeks. According to forecasts of many biggest international companies, oil prices will not be able to exceed $60 per barrel in 2009.

Western analysts differ concerning blame of OPEC in situation on the oil market. According to U.S Cascade Policy Institute energy policy analyst Todd Wynn, there is no blame of OPEC on situation with oil prices. According to him, there are many other factors significantly impacting price dynamics.

"It is amazing to me that many blame OPEC on price instability when many factors determine the price of oil including the demand for energy resources by consumers who condemn OPEC for attempting to manipulate supply and thus prices," Wynn told Trend via E-mail on July 15.  

According to many analysts, demand for oil products significantly reduced because of much reduction in the biggest European corporations amid world financial crisis.

U.S scientist, Pioneer Astronautics president Robert Zubrin said that OPEC influences recent volatility of prices on the market. According to him, OPEC striving for high oil prices creates real threat for world economy.

The only answer is to break the OPEC oil cartel by creating fuel choice internationally, Zubrin said.

" We need to get out from under these people," Zubrin told Trend .

A price is partly determined by what countries/individuals are willing to pay for a product, Wynn said.  

If we (the USA) don't like paying a certain price for a barrel of easily accessible oil, then we have the option of paying more for our less accessible oil reserves, Wynn said.

"$60-$70 price is a preferred price to pay for G8 countries.

The USA is the biggest consumer of oil products in the world. According to forecasts BNP Paribas, it expects that oil prices can drop to $45 per barrel by late summer amid lack of stabile demand for oil products in the USA. According to analysts of the bank, there is almost lack of increased summer demand for oil in the USA in 2009. It is consequence of high level of unemployment obliging consumers to save. 

Participants of G8 summit held in Italian city of Aquila came to one conclusion that the most fair oil price id $70-80 per barrel.

But in a global marketplace, suppliers and consumers come to different arrangement, Wynn said.

According to him, administrative measures of oil market regulation could be somewhat effective but there are always unknowns such as the level of economic growth or recovery from the recession.

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