Weak dollar not sole reason for high oil prices

The balance of international crude oil supply and demand remains tight.

According to OPEC’s latest monthly report, demands from the Organization for Economic Cooperation and Development (OECD) countries will slightly decline, while demands from non-OECD nations, including some in Asia, the Middle East and Latin America, will stay strong, leading to a growth of global demand for crude oil.

OPEC’s expectations about “reasonable oil prices,” as well as statements of some member countries that the prices have not significantly deviated from the reasonable level, are making analysts more skeptical about the cartel’s readiness to curb the current high prices with an output increase.

Frank Schallenberger, an oil analyst from the German bank Landesbank Baden-Wuerttemberg, said: “As long as OPEC’s output growth is insufficient to offset the demand from Asia, oil prices will continue to rise.”

Xinhua