Published On: Mon, Apr 27th, 2009

OPEC weekly oil prices drop below $50 again

The weekly average prices of the Organization of Petroleum Exporting Countries (OPEC) dropped to 49.03 U.S. dollars per barrel last week, said the Vienna-based cartel Monday.

After exceeding 50 dollars in the last week of March and the second and third weeks of April, this was the second time for OPEC weekly average prices to fall below 50 dollars.

The OPEC oil prices have fluctuated around 50 dollars since the decision was made to maintain its production quota in mid-March this year.

Statistics showed that OPEC’s production cut is currently slowing down. According to statistics provided by the international tanker-tracking agency “Oil Movements” last Thursday, in the last four weeks as of May 9, the daily crude oil export of most OPEC members decreases 130,000 barrels on average, significantly slower than the previous weeks.

However, according to the U.S. Energy Information Administration, in the last four weeks as of April 17, U.S. crude oil demand dropped 6.5 percent compared with the same time last year, while its stocks of crude oil and finished oil products have seen an overall growth, preventing further oil prices rebounds.

It is generally predicted that the international crude oil prices will not experience real revival before the U.S. economy is stabilized. In the near future, the prices will remain fluctuating around 50 dollars per barrel.

The world economic recession will further negatively influence the demand in the crude oil market, but the fluctuation in the U.S. stock market may bring about short-term rebound in oil prices.

Several OPEC high-ranking officials have expressed dissatisfaction with the current international oil prices. OPEC Secretary General Abdalla el Badri noted in public again that the current oil prices of 50 dollars per barrel are too low to maintain reproduction in the crude oil industry. He believed that 70 dollars per barrel should be an “appropriate and acceptable” price.

At the end of this May, OPEC oil ministers will meet again in Vienna to discuss future market supply and demand situations in the international crude oil market so as to decide future production quotas.

 

Source: news.chemnet.com