Commentary by Eric Wilder – The oil minister of Saudia Arabia, Ali Naimi, said in New Delhi that "I have no control over prices. We accept that they're high, and of course, we want them to come down."  Naimi’s statement isn’t totally true.  What he means is, OPEC no longer has control over the downward movement of crude oil prices.  One of its members, however, is directly responsible for its continued high price near $70 per barrel.

OPEC is producing near its capacity and has little ability to lower prices by opening the tap as it once did.  It still affects the price of oil, but in an upward sense.  Threatened sanctions on Iran are causing marketers to keep the price of oil near $70 per barrel.  Iran is the number two producer in OPEC and crude oil is its major export.  Sanctions against this country would adversely decrease the world’s supply of crude oil.  The resultant imbalance between supply and demand would surely cause crude oil prices to rise dramatically.

Despite Ali Naimi’s claim of no control, nervous oil marketers know the truth and are keeping a wary eye on the continuing situation.

http://www.ericwilder.com   http://justeastofeden.blogharbor.com   http://ghostofachance.blogspot.com   http://ericwilder.blogspot.com