Posted on 05/07/2018 10:18:13 AM PDT by bananaman22
Two senior Iranian government officials have said oil prices shouldn’t be too high, with the comments indicating the divide between Riyadh and Tehran on oil pries is deepening.
First, Oil Minister Bijan Zanganeh said over the weekend that Iran was all for a “reasonable” oil price, suggesting the current price level is unreasonable and the result of “manufactured tensions.” A reasonable oil price, on the other hand, would be positive for producers, encouraging them to continue pumping while at the same time reducing the risk of excessive market volatility, state news agency Shana reported.
Then, Zanganeh’s deputy for international and commercial affairs, Amir Hossein Zamaninia, elaborated on what a reasonable price is for Tehran: between US$60 and US$65 a barrel. That’s US$10-15 lower than the current level, at which Brent and WTI are trading as the market awaits President Trump’s decision on whether to reimpose economic sanctions on Iran.
(Excerpt) Read more at oilprice.com ...
It’s strange to hear an OPEC member acknowledge “that the cure for high prices is high prices”, and vice-versa.
That is, if prices get too high, demand drops, supply picks up, and prices drop.
Conversely, if prices get “too” low, demand picks up, supply drops, and prices come back up.
For many years, the OPEC members were go-go-go on price. I make minor allowance for the Saudis who were more sophisticated economically, and often willing to act as a swing producer.
Probably means they go higher.
Women, children and minorities affected most.
Of course he thinks they are too high.
Because Trump opened up drilling on US territory, they want to lower price to drive US investors away and sell more of their oil.
If US was not drilling, they would be happy to keep the prices sky-high.
“Probably means they go higher.”
Won’t go much higher, not for long anyway. Those fracking wildcatters out in West Texas are bringing rigs on line as I’m writing this. Whenever oil goes above $50 ~ $60 those guys get busy...
Right. Suddenly a lot of people can make money at these prices. Drill, baby, drill.
I agree with you, but that is in fact a market call. Perhaps over a longer term; Right now, oil, which of course is a commodity, behaves like commodities do. Meaning everybody rushes to one side of the boat like teenagers at a Bieber concert, and they go farther than anybody imagines in their wildest dreams. Remember $128 oil? $26 oil? That does not mean that oil will not eventually come down, but on war fears in the ME, oil is ramping quite strongly. I would not rule out a sudden move to $80. It will go where few imagine it will go.
I agree with you. I see several factors pushing the oil price up. The M.E. war rumors are significant, and another factor is inflation. We may be about to enter an era of high inflation again, as in the 1970s.
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