10/15/10

"OPEC Members Seek $100 Oil to Counter Dollar Weakness"

"The 13 percent decline in the Dollar Index since June has led some OPEC members to call for oil to rise to $100 a barrel.

Are there correlations
between currency, debt, natural resources, peace and war?


The U.S. currency’s weakness means the “real price” of oil is about $20 less than current levels, Venezuelan Energy and Oil Minister Rafael Ramirez said after yesterday’s meeting of the Organization of Petroleum Exporting Countries...

Have American legislators and the Federal Reserve
been abusing the dollar’s status as a reserve currency
to avoid overtly raising domestic taxation
by covertly taxing US dollar denominated assets like oil
by over-printing money?


...“OPEC is not interested in compliance right now,” Nordine Ait-Laoussine, the former Algerian oil minister who now runs Geneva-based consultant Nalcosa SA, said in an interview in Vienna. “They’re concerned about the dollar because as the dollar weakens, prices go up..."

Shokri Ghanem, chairman of Libya’s National Oil Corp., said a higher crude price would help OPEC offset the loss of revenue from the weaker dollar.

“We would love to see $100 a barrel,” Ghanem said yesterday in Vienna. “We’re losing real income. Libya in particular would like to see a higher oil price.”

...“So far, the perfect price has been $60 to $80, and now they’re talking about $80 and $100,” said Sean Brodrick, a natural resource analyst with Weiss Research in Jupiter, Florida. “This all tells me OPEC is quite happy with higher prices and quite unhappy with the fall in the U.S. dollar.”

Speculation that the Federal Reserve may further loosen monetary policy through so-called quantitative easing has weakened the dollar. Fed Chairman Ben S. Bernanke, who will be speaking in Boston today, said Oct. 4 the central bank’s first round of large-scale asset purchases aided the economy and further buying is likely to help more.

...Oil consumption worldwide will average 86.9 million barrels a day in 2010 and 88.2 million barrels a day in 2011..."

Grant Smith
Bloomberg

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