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Thursday, September 6, 2007

6. Oil Prices Rise

Well folks, gone are the days of low oil prices in the world market. With demand rising daily as the new economies come on stream and car production increasing, the thirst for oil cannot be quenched. Coupled with the fact that OPEC countries are controlling the supply side, and greed on both sides increasing, we are faced with the inevitable. Now even the hurricanes are playing havoc with oil prices. Everybody wants to use up the oil before it is finished and to use up more of their share than they should. What do we do? Petrol prices are bound to go up and and we have to start thinking of alternative, cheaper sources of energy to power up our economy. Any ideas from anyone?

World crude prices climbed on Tuesday, as Qatar's energy minister said OPEC would not move next week to increase the cartel's oil output to battle tight global supplies amid strong energy demand.

They had earlier fallen as traders predicted that Hurricane Felix would probably avoid crucial oil installations in the US Gulf of Mexico.
In London, the price of Brent North Sea crude for October delivery rose 35 cents to 73.76 dollars per barrel.

New York's main futures contract, light sweet crude for delivery in October, gained 74 cents from its closing price Friday to 74.78 dollars per barrel.

US floor trading was shut Monday owing to a US national holiday.

Qatar's energy minister on Tuesday declared that there were no plans to increase crude oil production at next week's OPEC meeting in Vienna as the 12-nation cartel sees no shortages in the market.

"There will be no increase in production as supply and demand are in balance and the market is not suffering from any shortages," Abdullah bin Hamad al-Attiyah said at the sidelines of a conference on gas in Doha.

When asked about calls for the oil cartel to boost output, Attiyah said that OPEC had to be cautious before taking that step.

"In our contacts with clients, we have not seen increased pressure or need in the market," added Attiyah, who is also Qatar's deputy prime minister.

At its last regular meeting in March, the Organization of Petroleum Exporting Countries decided to keep its official production quota at 25.8 million barrels of oil per day.

"I think they're happy with oil prices at these levels," Bank of Ireland analyst Paul Harris said Tuesday in reference to OPEC.

Oil prices had meanwhile fallen earlier on Tuesday as Hurricane Felix looked set to miss energy facilities.

"I'm not sure Felix is going to be a big driver for prices," said Societe General analyst Frederic Lasserre.

Felix, which reached top category five strength on Tuesday, became the second hurricane of the US Atlantic storm season on Saturday.

According to Lasserre, even if Felix ends up shutting down Mexican oil output, the disruption will likely be temporary and production will probably return to normal within days.

Last month, Hurricane Dean had forced Mexican state-owned oil company Pemex to shut down its oil output of approximately 2.7 million barrels per day - AFP.