Crude oil won't climb as high as the US$105 a barrel suggested in a report by a Goldman Sachs Group Inc analyst, said OPEC's Acting Secretary-General Adnan Shihab-Eldin.
"We do not think that prices have to go that high," Shihab-Eldin said in an interview on the Australian Broadcasting Corp's Inside Business program yesterday. A March 30 report by Goldman analysts said crude oil prices may reach US$105 because of a "super spike" caused by increasing demand.
Shihab-Eldin, a Kuwaiti who formerly headed research at OPEC, said prices are "high enough and maybe too high and we need to bring them down to a moderate level."
OPEC, which pumps about 40 percent of the world's oil, has raised its output four times within a year in an effort to prevent record prices from damping global economic growth. It last boosted its output target by 500,000 barrels a day on March 16. Members increased daily production by 238,000 barrels to an average of 29.92 million barrels a day last month, according to a Bloomberg survey.
Oil for May delivery fell US$0.79, or 1.5 percent, to US$53.32 on the New York Mercantile Exchange on April 8, the fifth straight day of declines and the longest stretch of falling prices since August. Prices are still 44 percent higher than a year ago and touched a record US$58.28 last Monday.
Concern that OPEC won't be able to meet rising demand in the event of terrorism in Saudi Arabia or Iraq, or political instability in producers such as Venezuela or Nigeria, has contributed to higher prices and isn't justified, Shihab-Eldin said.
"We believe OPEC will continue to make investment and will have the right amount of oil production capacity -- and some to spare -- should there be a disruption," he said. "We were able to meet the disruption in Iraq in 2003 and in 1990 the disruption from the Kuwait crisis."
The organization's 11 members are targeting 10 percent "spare capacity" in order to respond to sudden disruptions, he said.
Saudi Arabia, the world's biggest oil exporter, may boost its output capacity by a third in the next 15 years to help avert shortages and lower prices, the country's oil minister said last Tuesday. The country, which has an output capacity of 11 million barrels a day, could pump 15 million barrels a day "anytime over the next 15 years," Ali al-Naimi said.
OPEC suspended its price target of US$22-US$28 a barrel in January and work is under way to set a new range that may be announced in September, Shihab-Eldin said.
A "more realistic" band could have a lower limit of US$20-US$30 and a high end of "maybe US$50," he said. "We are still continuing our studies."
Goldman equity analyst Arjun Murti discussed the possibility of US$105-a-barrel oil in a report titled Super Spike Period May Be Upon Us. Murti's report drew criticism from investor Jon Burnham at Burnham Securities Inc in New York, who described it as "self serving" because Goldman is one of Wall Street's two largest commodity traders.
Goldman Chief Executive Henry Paulson on Wednesday said his analysts are totally independent from traders, who were "as surprised as everyone else was" by Murti's report.
Media reports simplified Murti's report, Paulsen said.
"Goldman Sachs isn't predicting that it's going to go up to US$105," he said.
PROVOCATIVE: Chinese Deputy Ambassador to the UN Sun Lei accused Japan of sending military vessels to deliberately provoke tensions in the Taiwan Strait China denounced remarks by Japan and the EU about the South China Sea at a UN Security Council meeting on Monday, and accused Tokyo of provocative behavior in the Taiwan Strait and planning military expansion. Ayano Kunimitsu, a Japanese vice foreign minister, told the Council meeting on maritime security that Tokyo was seriously concerned about the situation in the East China and South China seas, and reiterated Japan’s opposition to any attempt to change the “status quo” by force, and obstruction of freedom of navigation and overflight. Stavros Lambrinidis, head of the EU delegation to the UN, also highlighted South China Sea
The final batch of 28 M1A2T Abrams tanks purchased from the US arrived at Taipei Port last night and were transported to the Armor Training Command in Hsinchu County’s Hukou Township (湖口), completing the military’s multi-year procurement of 108 of the tanks. Starting at 12:10am today, reporters observed more than a dozen civilian flatbed trailers departing from Taipei Port, each carrying an M1A2T tank covered with black waterproof tarps. Escorted by military vehicles, the convoy traveled via the West Coast Expressway to the Armor Training Command, with police implementing traffic control. The army operates about 1,000 tanks, including CM-11 Brave Tiger
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, said it expects its 2-nanometer (2nm) chip capacity to grow at a compound annual rate of 70 percent from this year to 2028. The projection comes as five fabs begin volume production of 2-nanometer chips this year — two in Hsinchu and three in Kaohsiung — TSMC senior vice president and deputy cochief operating officer Cliff Hou (侯永清) said at the company’s annual technology symposium in Silicon Valley, California, last week. Output in the first year of 2-nanometer production, which began in the fourth quarter of last year, is expected to
Taiwan’s drone exports surged past US$100 million in the first quarter, exceeding last year’s full-year total, with the Czech Republic emerging as the largest buyer, the Ministry of Economic Affairs said. Exports of complete drones reached US$115.85 million in the period, about 1.2 times the total recorded for all of last year, the ministry said in a report. Exports to the Czech Republic accounted for about US$100 million, far outpacing other markets. Poland, last year’s top destination, recorded about US$11.75 million in the first quarter. Taiwan’s drone exports have expanded rapidly in the past few years, with last year’s total
RSS