As crude hovers near the US$90 mark, OPEC members seem to be quite comfortable with allowing the price to finally hit this ‘magic’ number. According to analysts $90 per barrel will not trigger the pumping in of extra oil into the market as the oil cartel is reluctant to fiddle with its official output targets.
If the world’s major oil producers are unlikely to budge on production quotas, there is sure to be a knock-on affect on worldwide oil and gas development and the Middle East would be no different in this regard, although the hydrocarbon-rich region could certainly absorb the blow.
World oil demand is being led single-handedly by China’s massive economy with its voracious energy demand. This could see global demand grow by 2 million barrels per day (bpd) to over 86 million bpd bringing it back up to the pre-economic-downturn levels seen in 2007.
J.P. Morgan predicts that oil would top $100 in first half 2011 and reach $120 before the end of 2012 adding that OPEC would be ‘very slow’ to react to the higher prices.
Do you think oil will hit the magic number of $90 a barrel before the year is out, will it even surpass this? Â What are the drivers for the price rise? What implications do you think it would have for the oil and gas industry, will projects slow down or not get awarded altogether? Let us know.
