OPEC oil price push may threaten world recovery

WASHINGTON, May 28 (UPI) — Oil prices are rising — and OPEC is pleased. But it’s not clear whether the rebound comes from a recovering global economy or worries about the future — or even both.

With the global economy expected to ease and bring an increase in demand for fuel, the Organization of the Petroleum Exporting Countries said Thursday it was leaving its target of oil production unchanged.

The reduction in production initially showed little price-support success as the worldwide recession deepened and demand fell, dropping the price of oil to the mid $30s per barrel through the winter. This was after the record run up to $147 a barrel last July and the resulting $4 a gallon gasoline pump price in the United States.

However, in recent months, oil prices have been climbing. The price has rebounded to $63.67 a barrel Thursday.

That isn’t enough for the leaders of Saudi Arabia, the world’s largest single oil producer and exporter and the swing production nation with more power over global oil prices than any other country. Saudi leaders have set a price of $75-$80 a barrel as their target and that, while substantially less than prices a year ago, is about 20 percent higher than current trading figures.

United Press International