OPEC Secretary-General Abdullah el al-Badri said Sunday oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply — something he doubted.
"Oil prices, there is a common understanding that has nothing to do with supply and demand," al-Badri said on the sidelines of an energy conference in Rome.
Oil prices reached a new high Friday at $117 a barrel.
A host of supply and demand concerns in the U.S. and abroad, along with the dollar's weakness, have served to support prices, even as record retail gasoline prices in the U.S. appear to be dampening demand. Crude prices have risen as much as 4 percent last week.
The OPEC chief said the Organization for Petroleum Exporting Countries "will not hesitate" to increase production if the group thought the higher prices were due to shortages. But he said more oil will not solve the high prices.
OPEC's production levels were just one of many factors, he said.
"But how much higher it will go, of course it depends on a number of things: the political situation, whether there is a natural catastrophe, whether there are speculations in the market, whether there are strikes in certain producing countries. So there are many other factors other than OPEC production," al-Badri said.
As I have always suspected, the increase in prices have less to do with supply/demand or the status of the dollar, but more to do with the OPEC nations (most of which are in the Middle East) who are doing this to spite the Western World by using it as another "front" on the war with radical Islam.
How to deal with this problem? Easy!
Drill in ANWAR (upper Alaska, only two square miles of land out of 500,000 in that state), drill in the Gulf of Mexico off the coast of Florida, extract oil from shale - extracting in place, not via excavation - in the four-state region of Colorado/Utah/Wyoming/Montana. These three things alone would supply us with 1/3 of the total amount of oil we annually export from overseas.
In addition, build new refineries (something which hasn't been done in over 25 years).
Build new nuclear fission power plants (one thing that France has done right. Notice that no accidents have occurred anywhere in the world since Chernobyl and 3 Mile Island? The industry has learned from these incidents and have become much safer).
Dump the stupid, corn-based ethanol fiasco (which is inefficient in that it takes too much energy to extract and convert ethanol from that source, plus it raises the cost of all other corn-base products as well as corn itself - for food and also for animal feed, which raises beef and chicken prices). Instead, import the more efficient sugar cane-base ethanol from Brazil and other South American allies.
Invest more in fuel-cell technology, nuclear fusion technology, and other alternative energy technologies (provided that they are promising, efficient, and cost-effective).
And, finally, break up OPEC and make individual producers do their bidding in a true, free open market system. This will foster competition while also letting the world know which oil-producing countries are doing suspect dealings (i.e., making known which questionable regimes they support by analyzing the pricing deals they make to sell their oil).