Will Opec have a happy new year?
According to the cartel, oil prices have increased considerably in the past year to reach “perfect” levels. But will 2010 be more profitable?
December 23, 2009 8:08 by Aarti Nagraj
Oil prices have increased 67 percent this year after falling 54 percent in 2008, thanks to signs of improving economic conditions worldwide, says Bloomberg. On Tuesday, the National Association of Realtors said that prices of existing homes in the US increased 7.4 percent in November as compared to October, which further helped to boost oil prices.
According to the Energy Information Administration (EIA), Opec’s oil export earnings reached about $512 billion in the first 11 months of this year, with crude oil prices averaging at $60. The body is expected to make about $575 billion in 2009, as compared to a record $965 billion in 2008. According to Opec, world oil demand declined for the second successive year, the first time since the early 1980s.
But the EIA has predicted that the earnings are expected to rise sharply in 2010, and reach around $759 billion because of higher oil prices and greater demand.
“We are seeing signs of an economic recovery, largely driven by developing countries such as China and India, yet we still need to remain cautious and take things slowly,” Abdullah el-Badri told Reuters earlier this month.
“There is no doubt that the oil market remains complex and difficult to gauge. We continue to see price volatility, which makes it difficult to judge what is really happening. Oil supplies are abundant,” he said.