Tuesday, May 11, 2004

What the Saudis giveth, the Indonesians taketh away.
Indonesia's energy minister, Purnomo Yusgiantoro, warned yesterday that there was little the world's largest oil exporters could do to rein in oil prices.

In an interview with the FT Mr Yusgiantoro, who is the current president of the Organisation of Petroleum Exporting Countries, said that high crude oil prices could last through summer. But he blamed "very tight" gasoline stocks in the US due to new regulations there, the actions of speculators, and geopolitical issues including the unrest in Iraq.

"I don't like these kinds of prices. These kinds of prices will really hurt everybody," he said. "But this price level is not because Opec is playing. There is not much Opec can do."
Most importantly, the FT reports that getting oil prices back into the preferred OPEC band of $22-28/barrel is quite frankly off the table. According to Yusgiantoro, get ready for a wholesale upshift in the band itself -- and "soon".

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