Rising oil prices are more the result of the depreciation of the dollar than market fundamentals, Libya's top oil official said Thursday.
Rising oil prices are more the result of the depreciation of the dollar
than market fundamentals,
Libya
's top
oil official said Thursday.
"The price movement upward, very little is due to fundamentals, we know
there's improvement in demand in China and India and some developing countries
but the main reason is the depreciation of the dollar and improvement in demand
and compliance," said Shokri Ghanem, Chairman of Libya's National Oil
Corp.
Ghanem's comments came as crude oil futures hit a 25-month high in London
Thursday amid strong oil and industrial production data from China and
expectations of continued U.S. dollar weakness. At 1125 GMT, the front-month
December Brent contract on
London
's ICE
futures exchange was $0.40 higher at $89.36 a barrel, off its 25-month high of
$89.70 a barrel.
Also Thursday, the Organization of Petroleum Exporting Countries released a
monthly report that raised its estimates of oil demand growth for 2010 and
2011. It said the new economic outlook was supported by a better-than-expected
expansion in the manufacturing sector, notably in
Germany
and
India
.
Ghanem, who also addressed the upcoming OPEC meeting in
Ecuador
in a
telephone interview with Zawya Dow Jones, said he expects to see the rally in
oil prices continue in 2011 as the recent rise in prices was not enough to
compensate the weak dollar and price rise in food and other commodities. Ghanem
has been predicting that prices would hit $100 a barrel in 2011.
The weaker dollar is undermining the purchasing power of many OPEC states,
which earn most of their revenue in dollars, the currency used to price most
international oil transactions.
Ghanem said that although OPEC will call for greater compliance when it meets
in
Quito
,
Ecuador
in
December, it will not be taking action on quotas.
"In
Ecuador
, so
far the agenda is to review market development, we are not expecting any
decision on quotas there because we think there is no serious situation yet in
the market but we will call for more compliance," Ghanem said.
"Some OPEC members are now trying to improve their compliance because they
realize compliance is needed to create stability in the market," he added.
The 12 OPEC member countries are set to meet on Dec. 11 in
Quito
.
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