OPEC does not want crude to reach USD100/barrel

OPEC said it would not be "comfortable" if the price of crude oil returned to USD100/barrel, says the Cartel"s secretary general, Abdalla El-Badri.

He said he doesn"t expect the price of oil to reach three digit figures in the near future, as there is "no shortage of oil supply." He said that yesterday"s rise in oil prices to the year"s highest levels (over 80 dollars a barrel) was caused by rising equities, dollar depreciation and speculation.

OPEC, an organization which provides 40% of the world"s oil production, will hold a meeting on December 22nd in Luanda (Angola) in order to establish its future strategy. El-Badri said that it"s too early to predict what the reunion will bring, but he mentioned that OPEC is concerned about the 125 million barrels of oil and fuel that remain stored in oil tankers. "When we see that floating storage eliminated it means demand is stabilizing", said El-Badri, who added: "An USD80 price is a bit too steep".

According to El-Badri, OPEC member countries should stick more closely to their quotas. Quota compliance for September was just 62%.

On the other hand, El-Badri mentioned that seven out of the 35 oil projects postponed last year in OPEC countries due to the rise in oil prices were resumed due to the rally in prices.

• Declining fuel inventories in the US

Oil and distilled stocks in the US seem to be dropping for the second week in a row, in line with market expectations. Official data will be published today by the Department of Energy, and analysts estimate that gasoline inventories shrank 1.5 million barrels in the week which ended on October 16th. A 1.6 million barrels decline is expected for refined oil products inventories. However, oil inventories are expected to have risen by 1.5-2 million barrels over the same period.