Oil Producers, Consumers Say Prices Will Stay High

Oil prices, after surpassing $75 a barrel last week, are unlikely to decline until OPEC countries and Western nations invest enough in new fields and refineries to meet rising energy demand.

Edmund Daukoru, president of the Organization of Petroleum Exporting Countries, told reporters today in Doha, Qatar, that crude oil will stay around an average of $60 to $65 a barrel. Claude Mandil, executive director of the International Energy Agency, which represents the interests of oil-importing nations, said crude supplies will stay tight through the end of the decade.

Officials from oil producing and consuming countries are holding biannual talks on world energy supplies after crude prices reached a record $75.35 a barrel in New York last week. A further $10 increase would replicate in inflation-adjusted terms oil costs of 1981, when consumer prices were rising by about 10 percent and interest rates soared.

“Even with the spare capacity plans currently in place, this will not keep oil prices from being volatile,” European Union Energy Commissioner Andris Piebalgs said today, declining to give an expected range for prices. The situation will persist until 2010, he said.

Bloomberg