16-03-08

OPEC, rebuffing calls from US President George W. Bush to increase oil output, cited "mismanagement" of the American economy as a major factor driving prices up.
OPEC members, meeting in Vienna, Austria, decided to leave their production levels unchanged, declaring that the market has plenty of oil already. The OPEC president blamed financial speculators and American economic problems, which have helped lower the value of the dollar, for the high oil prices. After the meeting, oil prices settled above $ 104 a barrel, a record.

In January, Bush travelled to Saudi Arabia and urged producers to open their taps. But the plea failed to sway OPEC. When the group met in February, it kept its production level unchanged.
The rally in oil prices was prompted in part by tensions on the border between Venezuela, a major oil exporter, and Colombia, as well as by government data in the United States showing a drop in stockpiles of oil and some of the fuels made from it. Prices, which have risen 73 % this year, have settled above the $ 100-per-barrel mark for 7 of the past 12 trading sessions.

With the US economy slowing down, oil prices have risen as investors flee the stock market and seek refuge in hard assets like commodities. The fall in the value of the dollar gives OPEC an incentive to keep prices high: Since oil is sold in dollars, petroleum producers see the value of their exports decline any time the dollar drops. The dollar has lost 17 % of its value against the euro this year.
"OPEC is angry that President Bush wants them to increase production while the dollar is sinking and the administration is doing nothing about that," said Fadel Gheit, an oil analyst at Oppenheimer.

The falling dollar has complex economic effects in the United States, not all of them bad. The drop is helping to fuel a surge of American exports, one of the few bright spots in a struggling economy.
Higher energy prices, which have been rising relentlessly for nearly a decade, are creating tensions between consuming nations and producers around the world. Oil-rich countries like Russia and Venezuela have become more demanding in their dealings with foreign oil companies, often restricting access to prime drilling locations.

In the United States, rising energy costs are weighing on an economy that is struggling with a housing slump and a credit crisis.
Most energy analysts dismissed the call for additional supplies as political rhetoric. In comments, the president said the United States needs to reduce consumption.

Source: www2.irna.ir