"It's a warm spring day in Vienna, and OPEC delegates meeting in the former imperial capital seem more relaxed than they have been in months. There is less behind-the-scenes skullduggery than usual. Instead, it's an opportunity to hold leisurely dinners with colleagues, or even take time out to watch Barcelona beat Manchester United in the European Champions' League soccer match on TV. And why not? The oil market, deathly ill just three months ago, has recovered faster than just about anyone—including OPEC—expected, with prices now above $63.50 per barrel. "They are jubilant," says Kamel Al-Harami, a Kuwaiti oil analyst.
It came as no surprise that with prices moving up OPEC saw no reason to change production levels at its May 28 parley. "Stay the course," the Saudi Oil Minister Ali Naimi shouted cheerfully as he left OPEC's glassy blue and white building to take in the sunshine. OPEC's medicine for weak markets announced late last year—a series of cuts amounting to 4.2 million barrels per day—seems to be working, even though demand remains limp and inventories are near record highs. "We worry less when prices are improving," says the Algerian Energy Minister Chekib Khelil. He added that he thought rising prices were sustainable if the European economies follow what OPEC sees as signs of improvement in the U.S." Business Week
Time to start up the oil wars again on SST.
If Business Week is to be believed, OPEC restraints on production (their right), market action and investor belief in future higher prices are raising price per barrel in spite of low demand and massive inventories.
OK. Now let's hear from the "Peak Oil" people as to whether or not these rising prices reflect the undeniable long term shortages of hydrocarbons.
My Escalade is still purring along nicely on Regular gas. pl