Wednesday, December 8, 2010
No Signs OPEC Must Adjust Quotas, Qatar Minister Says
Oil futures are at a 2-year high ($90 a barrel), but Qatar's oil minister, Al-Attiyah, says the price spike has nothing to do with supply and demand. Oil inventories (supply) are actually the highest they have ever been, according to Al-Attiyah. OPEC has not adjusted oil production quotas in 2 years. Al-Attiyah says that oil is currently oversupplied and that demand for oil is not increasing that much - this should cause a price decrease but prices are at a 2-year high. Al-Attiyah offers no insight into why this has happened. Any ideas?
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2 comments:
Commodities in general are getting more expensive. Gold, crude oil, and copper are some of which that have become increasingly pricey over the past year. This is due to the fluctuations and uncertainties within various economies. People would rather be investing in tangible objects rather than intangibles. Therefore, the supplies and the demand for "real" use of crude oil may have been the same, the demand for holding the crude oil has gone up resulting in the higher price in crude oil.
I think more nations are vying for a very limited amount of oil. I find it very hard to believe that increasing prices of crude have nothing to do with supply and demand. Unless I was very misinformed, don't most estimates say that the world has already seen its peak production of oil?
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