Meanwhile, the warming weather in the northern hemisphere and the well-supplied oil market, among other factors, are proof that there is no need for an output increase, OPEC has repeatedly said.
OPEC's expectations about "reasonable oil prices", as well as statements of some member countries that the prices have not significantly deviated from the reasonable level, are making analysts more skeptical about the cartel's readiness to curb the current high prices with an output increase.
Frank Schallenberger, an oil analyst from the German bank Landesbank Baden-Wuerttemberg, said, "As long as OPEC's output growth is insufficient to offset the demand from Asia, oil prices will continue to rise."
Unstable geopolitical region
The reliability of the international crude oil supply is poor. Complicated geopolitical reasons, which acted as a booster for surging oil prices in 2007, will continue to have a negative effect on oil supply this year.
Five years have passed since the US-led invasion of Iraq, but the situation there remains volatile.
The conflict between Turkey and Iraq shows no sign of being resolved, and the future of the Iran nuclear issue is still uncertain.
All these factors have added too many variables to the Middle East, an important region for crude oil production.
Moreover, several other important oil producing and oil transporting junctions are also located in the unstable geopolitical region, increasing uncertainty regarding oil supply in the international market.
These factors have played an important role in driving up prices.
Further, the US Federal Reserve plans to cut interest rates several times this year, which will lead to a further weakening of the US dollar.
In view of this, although the global economic slowdown and the warming weather are expected to drag down oil prices, investors will push up prices in the face of inflation. As a result, international oil prices are likely to continue to maintain an upward tendency.
(Xinhua News Agency April 18, 2008)
