|Oil prices could hit $80 within two years
|Opec warning comes as crude hits highest level in 4 months
Prices of crude oil could rise to as high as $80 a barrel within the next two years although such a price band would not last long, OPEC's acting secretary general was quoted as saying Thursday.
"I can affirm that the price of a barrel of crude oil rising to $80 in the near future is a weak possibility," Adnan Shehab al-Dine told Kuwait's Al-Qabas newspaper.
"But I cannot rule out (the possibility) of oil prices rising to $80 a barrel within the next two years," he said.
"If the oil price rises to this level for one reason or another - for example, interruption of supplies from a producing nation by 1 to 2 million barrels a day - it is not expected to continue for long," he said.
Shehab al-Dine said a price rise to between $50 to $60 a barrel for a period of two years or more will inevitably boost investments to increase supplies and lead to a drop in demand, eventually reducing prices.
World oil prices were mixed on Thursday after reaching four-month highs in New York and London the previous day amid a rise in U.S. crude stocks and jitters over increased global demand.
The crude oil closed in New York at just over $53.05 a barrel for the second day, the highest closing level since Oct. 26.
In London, the price of Brent North Sea crude oil for delivery in April rose $0.08 to $51.30 a barrel on Thursday, after earlier reaching a new four-month high of $51.50.
"The continued upward trend in crude prices is a reflection of market perception that has changed in the last few weeks," London-based Barclays Capital analyst Kevin Norrish said.
"The market is very sensitive to any kind of supply disruptions at the moment."
The Organization of Petroleum Exporting Countries (OPEC) was to meet in Isfahan, Iran on March 16, when it was expected to maintain its current production level of 27 million barrels a day.
"OPEC certainly won't cut production, the question is whether they will agree to increase production," Barclays Capital's Norrish said.
Shehab al-Dine said it was in the interest of OPEC and other countries not to see "big and surprising spikes in oil prices, but a gradual balance."
Traders were meanwhile digesting figures from the U.S. Energy Department (DoE) which Wednesday showed a rise in commercial crude inventories and a fall in distillates inventories broadly in line with expectations.
Distillates, including heating oil and diesel fuel, dropped 1.8 million barrels to 110 million in the week ending Feb. 25.
Crude oil supplies had risen 2.4 million barrels to 299.4 million, slightly better than forecast, the DoE added.
The Daily Star