The latest rumblings in the Yukos affair this week have raised more questions about OPEC's ability to control oil prices and further strengthened a widely-held view that a US$50 barrel might not be too far in the future.
OPEC, which has in the past been known to keep a tighter ship, has recently issued a string of contradictory statements which question its ability to react to the current ructions.
Its president Purnomo Yusgiantoro began by putting the wind up traders by declaring the current rates "mad" and adding that even Saudi Arabia, fittest of all OPEC's members, could not increase production in the immediate future.
Prices surged as experts interpreted the declaration as a sign there was no margin for safety available should a country default, an eventuality that gains extra significance in the context of Iraq, Nigeria, Venezuela and Russia, where oil giant Yukos staggers from one setback to the next.
Yusgiantoro attempted to make amends by saying shortly afterwards that OPEC did in fact have spare production capacity of up to 1.5 million barrels per day, before adding that whatever happened, no decision would be taken before the organisation's next meeting in mid-September.
The inconsistency must also be seen in the light of a clear error in evaluation in April which resulted in OPEC reducing its production ceiling by 1 million barrels a day, even though the price of oil was already above US$30 a barrel.
It also led analysts and consumers to doubt OPEC's determination to genuinely stabilise the market. Since then the cartel has performed a U-turn, raising its quota several times.
These difficulties, compounded by the increasingly tenuous state of Yukos and the concerns swirling round a referendum in Venezuela that could lead to a change of regime, sent oil prices spiralling upwards.
On Friday they were hovering around the US$41.5 per barrel mark in London and were at an historic peak of US$44.77 in New York.
Analysts said there was little sign of any real let-up for several months given the patent imbalance between supply and demand.
Indeed, demand looks set to grow sharply in the months ahead (an increase of 3.2 percent to 81.4 million barrels a day), nudged on by the recovery of the world economy and by rapid growth in India and China. Supply, on the other hand, already virtually at a standstill, will almost certainly not keep up.
Experts rule out another major oil crisis, even though many now accept that the US$50 a barrel price is on the cards.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat
RSS