A difference of opinion among Opec members on the cause of the recent oil price rises was evident at the cartel’s meeting in Vienna last week, with Saudi oil minister Ali Naimi was positive about the world economy, while some of his fellow Opec members, such as Chakib Khelil, Algeria’s oil minister, were speaking more warily about whether it was fueled by speculators.
Opec’s chief economist, Hassan Qabazard, told the National Oil Companies Congress in Abu Dhabi yesterday that it ‘non-fundamentals’ were a bigger driver than fundamental – and that prices might fall again as a result.
Platts reported (emphasis ours):
“I think personally prices for the fundamentals that we see today are quite high and that is due to the inflow of investment funds into the market…we see much more long positions by investors now in the market who
are expecting a higher price,” he said.
Asked whether this meant markets were set for a fall as a result of this activity, Qabazard replied: “They might. They are going up too fast…they are rallying the price up too fast,” he said.
Qabazard also pointed to the 200m barrel overhang in OECD stocks and 130m barrels of oil in floating storage; although he said this was expected “to be eaten up” by the end of this year, depending on demand.
Opec says oil price rally too fast, may fall on fundamentals (Platts, 02/05/09)
Opec ministers divided: fundamentals, or a bubble? (FT, 28/05/09)
Opec bets on recovery to boost price (FT, 29/05/09)