Libya's top oil official said Organization of Petroleum Exporting Countries won't change output quotas when they meet in Vienna this week but stressed that he wants to see crude oil at $100 a barrel by year-end as rising commodity prices erode the group's terms of trade.
Libya
's top
oil official said Organization of Petroleum Exporting Countries won't change
output quotas when they meet in
Vienna
this
week but stressed that he wants to see crude oil at $100 a barrel by year-end
as rising commodity prices erode the group's terms of trade.
"At these current prices OPEC is now losing its terms of trade--the real
value of oil is eroding and the prices of food and other commodities are
rising, so terms are going against OPEC and this needs to be looked at,"
Shokri Ghanem, who is also chairman of Libya's National Oil Corp., told Zawya
Dow Jones by telephone from Tripoli late Sunday.
New York Mercantile Exchange light, sweet crude oil futures for November
delivery were up 19 cents at $82.85 a barrel at 1030 GMT Monday. The contract
rose 99 cents to settle at $82.66 on Friday.
Commodity prices, including those of wheat, barley and corn, have surged
following poor harvest in
Russia
,
Ukraine
,
northern
Europe
and
Canada
due
to adverse weather. The surge accelerated on Friday, with corn up 13.5% and
wheat more than 10% after the
U.S.
government warned supply was tightening compared to demand.
Jason Schenker, chief economist at Prestige Economics, said although commodity
prices have risen at a faster rate than oil this year, the weaker U.S. dollar
was having more of an impact on crude prices.
"The downward pressure on the dollar has reduced some of the purchasing
power of oil, which is the reason prices have risen over the past month,"
Schenker said.
Ghanem said some OPEC members are happy with crude in the $70-80 a barrel range
but others, including
Libya
, are
not.
"We will talk about the situation of the terms of trade going against us,
this should not be neglected. I want $100 a barrel, we hope this will be by the
end of this year," he said. "From the behavior of the market there's
no expected major change, some members want higher prices and others are happy
with current prices but we will call for more observance of quotas."
OPEC members will meet in
Vienna
on
Oct. 14 to discuss market developments and decide on whether to take any
action.
Apart from
Saudi Arabia
and
Kuwait
, all
other OPEC members will be wanting higher oil prices but whether the group can
act in a unified way to achieve higher prices remains to be seen, said John
Hall, head of John Hall Associates.
"With only one member, Saudi, controlling overall output, OPEC is in a
weak position to make a difference unless it adjusts quotas to come more
closely in to line with current output levels," Hall said.
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