OPEC cautious as oil edges higher
OPEC eyes oil prices approaching an 18-month high, reiterates caution above $80
April 16, 2010 9:25 by Katherine Azmeh
Oil prices are once again higher than “OPEC’s comfort zone of $70 to $80 a barrel,” according to a Reuters report in Friday’s Daily Star. Oil traded above $84 Wednesday. This comes close to the 18-month high that just broke $87.
The story suggests that any further price increase could put a damper on the fragile economic recovery in “consumer countries,” straining the energy costs of businesses that already face high energy costs.
Saudi Arabia and other members of the OPEC have suggested that $70 to $80 is a price that producers can accept without jeopardizing economic recovery.
“The downside is very clearly defined – $70 to $75 is the bare minimum that they need to make new and sustain old investments. The upside, on the other hand, is not clearly defined,” said Amrita Sen, analyst at Barclays Capital, and quoted in the report.