Population Boom, Inflation Shrink OPEC Oil Windfall – EIA

LONDON -(Dow Jones)- Inflation and a population boom are whittling down
OPEC’s three-year oil bonanza, underscoring a policy shift to chase higher
prices, the U.S. Department of Energy says.
Inflation and per-capita adjusted, the petrodollar-dependent Organization
of Petroleum Exporting Countries earned only a third what it took in during the
late 1970s oil shock heyday, the Energy Information Agency, statistics arm for
the department, said in a report issued late Wednesday.
01-20 07:55: Population Boom, Inflation Shrink OPEC Oil Windfall – EIA

LONDON -(Dow Jones)- Inflation and a population boom are whittling down
OPEC’s three-year oil bonanza, underscoring a policy shift to chase higher
prices, the U.S. Department of Energy says.
Inflation and per-capita adjusted, the petrodollar-dependent Organization
of Petroleum Exporting Countries earned only a third what it took in during the
late 1970s oil shock heyday, the Energy Information Agency, statistics arm for
the department, said in a report issued late Wednesday. For 2005, per capita
revenue is projected at $606 compared with $1,771 in 1980 in real dollar terms,
it said in its latest brief on the group.
“This continues to have significant implications for OPEC oil price
preference and policies,” the EIA said.
The data highlights the group’s likely shift towards a higher target
price, offering little short-term relief for consumers as prices hover near the
$50 mark.
OPEC meets Jan. 30 to set production policy for the second quarter when
demand typically declines, among talk the group should set a higher price band,
the official range of prices it wants for its crude. Prices have been far above
that band for over a year.
Iran said OPEC won’t let the basket price drop below $34 a barrel and
Algeria warned the group couldn’t tolerate a price crash.
In nominal terms, windfall profits are likely to rise 2% this year to $345
billion, on top of an astonishing 42% jump from 2003, the EIA said.
Inflation adjusted, oil export revenue is about double the average seen in
the 1990s, but still far below the peak period of the early 1980s, the EIA
said.
The boom-and-bust cycle has stymied economic growth in the region, making
it difficult to plan budgets and pay off debt, the EIA said.
“The decline in per capita oil export reve has significant
implications for OPEC oil price preference and policies, especially combined
with the fact that OPEC countries are growing rapidly and that many OPEC
countries, despite their seeming oil wealth are heavily indebted,” the report
said.
Iraqi oil revenue crucial for bringing stabilizing infrastructure projects
to the worn-torn country could rise to $25 billion if sabotage slows and
exports crest at 2 million b/d from current 1.6 million b/d, the agency said.
-By Shai Oster, Dow Jones Newswires; +44-20-7842-9357;
shai.oster@dowjones.com

(END) Dow Jones Newswires
01-20-05 1055ET- – 10 55 AM EST 01-20-05
01/20 9:55a CST