Monday, January 7, 2008

Crude oil barrel at $100 'not necessarily very high'

"The price of 100 dollars for a barrel of crude oil is "not necessarily very high" given the high demand of oil and higher production costs, the president of OPEC said Sunday.

On Wednesday the price of a barrel of crude reached 100.09 dollars (67.85 euros) in New York, before retreating at the close to 99.18 dollars.

Algeria's Energy Minister Chakib Khelil -- who took over the rotating presidency of OPEC on January 1 -- told AFP that the current surge must be seen "in relation to the real price", that is taking into account inflation.

The current oil price was therefore below its 1980 record of "between 102 and 110 dollars depending on estimates", he said.

Khelil said that high oil demand was being pushed by "China and India but also by the Middle East whose consumption has risen immensely".

"When you take that into account, 100 dollars is not necessarily very high," he said.

Khelil said Saturday, "The surge in price will probably go on until the end of the first quarter of 2008, before stabilising during the second quarter."

Speaking on the sidelines of a conference on the security of hydrocarbon pipelines in the Algerian capital, Khelil said a second quarter stabilisation was "probable."


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