AFP. OPEC’s acting secretary general Adnan Shehab-Eldin told Kuwait’s Al-Qabas newspaper that he sees the possibility—if not the probability—of oil hitting $80 a barrel within the next two years.
His remarks came shortly before crude oil surged back above $55 a barrel in New York on Thursday, less than $1 short of a record, and reached a record in London on speculation that increasing consumption will outpace production this year. (Bloomberg).
Demand is still growing, particularly in China, and there is only a finite supply of oil out there, said Tom Bentz, an oil broker at BNP Paribas Commodity Futures Inc. in New York.
In February, Saudi oil minister Ali al-Naimi, predicted that crude prices would stay between $40 and $50 throughout 2005. Shehab-Eldin indicated that OPEC consensus was also firming around that price range as likely.
Last year, you may remember, OPEC, and most analysts, kept insisting that prices would drop back down from the $50 range to a more “sustainable” range—more on the order of $28–$35.
With predictions of 2005 bringing a drop in oil prices clearly in the rubbish bin, and future price increases ultimately on the way, OPEC is starting to put the $80 number out in the market.