Oil price could hit $170 a barrel, says Opec head

Algerian Energy Minister Chakib Khelil, president of the Organisation of the Petroleum Exporting Countries (Opec), forecast on Thursday that oil prices could rise to $150 to $170 a barrel during the northern hemisphere summer.

“I predict probably prices of $150 to $170 this summer. It [the market] will probably fall a bit towards the end of the year,” he said in an interview with the France 24 television channel.

Khelil said he did not expect prices to hit $200 a barrel, barring a major market crisis such as a halt in production in Iran.

In that case, he added, prices could possibly surge to “$200, $300, $400”.

In the short term, he said, “everything depends on the European Central Bank (ECB) and a decision it could take to raise eurozone interest rates”.

“At that time, I think the price of oil will increase.”

ECB policymakers are to meet on July 3 when many analysts predict they will decide to raise their benchmark rate by a quarter of a point to 4,25% in the face of rising inflationary pressure.

A strong euro, and a weaker dollar, would drive up demand for oil, which is marketed in the US unit and becomes cheaper for holders of non-dollar currencies.

Khelil also cited “threats against Iran”, where US and European officials suspect that authorities may be trying to develop nuclear power for military purposes.

“If they [threats] increase, I think the price of oil will rise further this summer as it would coincide with stronger demand for gasoline [petrol], particularly in the United States.” — AFP

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