ALGIERS/TOYAKO – OPEC president Chakib Khelil warned Sunday that oil prices will continue to rise because of the falling dollar, in an interview in the Algeria-News.
“The price of oil will rise again in the coming weeks. We have to follow the evolution of the dollar, because a one percent fall in the dollar means four dollars more on the price of oil,” Khelil, who is Algeria’s minister of energy and mines, told the independent daily.
“As producer countries we think that the current supply is sufficient, that this balance in supply is in everybody’s interests and that it shouldn’t be disturbed, because the current rise in oil prices is in nobody’s interest,” the head of the Organization of Petroleum Exporting Countries stressed.
He also commented on the geopolitical effects on the price of oil, notably the crisis between Iran and the West over its nuclear program and rejected the theory that oil cartel members were against boosting production to put a downward pressure on prices.
“I believe that 60 percent of the rise is due to the fall in the exchange rate of the dollar and to geopolitical problems, and 40 percent to the intrusion of bioethanol on the market,” he said.
“I can affirm that all the (OPEC) countries are in favor of new explorations (of oil reserves), but the fact is that the embargo imposed by Libya has prevented any increase of investment in that country, just as the current embargo on Iran is stopping anyone investing there,” Khelil said.
“The United States is threatening severe economic sanctions against any group which dares invest in Iran,” he added.
“Similarly, the war in Iraq is why investment there is weak. No OPEC country can invest in embargoed countries.”
Meanwhile, the leaders of the United States and Japan, the world’s two largest economies, agreed Sunday that urgent efforts are needed to tackle surging oil and food prices, Japan’s prime minister said.
The call to action came as leaders of the Group of Eight world powers huddled in the mountain resort of Toyako in northern Japan to discuss ways to bolster the global economy in the face of the surge in commodity and food costs.
High oil and food prices “are having a negative impact on the world economy,” Japanese Prime Minister Yasuo Fukuda told a joint press conference. “We agreed there’s a need for swift efforts on these fronts.”
Oil prices struck record peaks above $146 last week, up five-fold since 2003 amid supply worries and rising demand in emerging economies.
The higher cost of fuel and food has led to protests worldwide, from tens of thousands of truck drivers striking in Spain and Portugal, to street rallies in Asia and riots in Egypt and Haiti. – AFP

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