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OPEC Says Oil Prices Could Hit $80 in Next Two Years

March 7, 2005

KUWAIT CITY, KUWAIT — Prices of crude oil could surge to as high as $80 a barrel within the next two years but such a level would not last long, OPEC's acting secretary general was quoted as saying, as reported by Yahoo AFP news on March 4. "I can affirm that the price of a barrel of crude oil rising to $80 in the near future is a weak possibility," Adnan Shehab-Eldin told Kuwait's Al-Qabas newspaper. "But I cannot rule out (the possibility) of oil prices rising to $80 a barrel within the next two years," he added. "If the oil price rises to this level for one reason or another — for example, interruption of supplies from a producing nation by one to two million barrels a day — it is not expected to continue for long," he said. Shehab-Eldin said a price rise to between $50-$60 a barrel for a period of two years or more will inevitably boost investments to increase supplies and lead to a drop in demand, eventually reducing prices. World oil prices were mixed Thursday after reaching four-month highs in New York and London the previous day amid a rise in US crude stocks and jitters over increased global demand. New York's main contract, light sweet crude for delivery in April, fell 20 cents to $52.85 a barrel in electronic dealing. It had jumped $1.37 to close at $53.05 a barrel on Wednesday, the highest close since October 26. Shehab-Eldin said it was in the interest of OPEC and other countries not to see "big and surprising spikes in oil prices, but a gradual balance."
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