OPEC chief says 80-dollar oil won't last

OPEC chief Abdalla Salem El-Badri said Friday the current oil price of 80 dollars did not reflect fundamentals and was unlikely to last long.

"I don't think 80 dollars (per barrel) will last," El-Badri told journalists here. "The fundamentals do not support the price."

El-Badri said that the current price of oil was "too high."

Of course you like to say that.  However, you COULD say "we'll sell our oil at $50 a barrel", but you won't do it.

But OPEC did not have a target for the oil price, he said.

"We're not in favor a high price or in favor of a low price," the cartel chief said.

The price of oil surged to record highs this week even after the Organization of Petroleum Exporting Countries announced it would pump an extra 500,000 barrels per day from the start of November as a signal of the cartel's willingness to respond to supply fears in consumer countries.

One-off factors such as the hurricane season were behind that, El-Badri argued.

But still the cartel was scratching its head over the exact reasons.

"We're all asking ourselves why. Perhaps you (the markets) know something we don't."

Asked whether OPEC at its next meeting in December would discuss further raising output if the oil price persisted at current levels, El-Badri was tight-lipped.

"Of course, we will discuss supply, demand and inventories, as usual," he said.

"We don't enjoy seeing a very high price."

Well that's true and false.  It's false because anyone likes to the price of their product go up because it gives greater profits.

However, it's true because it's pushing away customers.  People are looking more and more towards alternative fuels, higher mpg cars and trucks and even electric vehicles.

If they don't do something quickly about the price, you'll soon find yourself looking at an electric car from many auto manufacturers.

What really bothers me though is that auto makers have taken this long to actually try to get an electric vehicle to market.  Sure, there were some prototypes out there from Honda and GM, but the cars went no where fast.

Now that the cost of fuel has gotten out of hand, there's a demand for electric and electric hybrid cars.  The minute there's a vehicle from a reputable manufacturer that allows me to do my daily commute (around 50 miles both ways) and not have to use a drop of gasoline, that's the minute I pull out my Visa and purchase that car.  The first one to do it wins my business, so hurry up auto makers!

 

Travis

travis@rightwinglunatic.com