$US90 cheap, says Iran
IRAN, OPEC’s number-two exporter, has hit out at the recent hike in oil prices saying real prices are far lower than the $US90-a-barrel of last week.
‘‘ Oil is still cheap,’’ acting Oil Minister Gholam Hossein Nozari said in an Iran newspaper. ‘‘ The sweet taste of oil is not tangible because it is very far from the range that is expected by us (Iran and OPEC).’’
Nozari argued that calculations based on current inflation rates and depreciation of the dollar’s value, as well as high costs of oil and gas projects, put oil’s true price at less than $US50 a barrel.
‘‘ Today’s prices even at the level of $US90 a barrel (in the market) are not effective because the real price of oil is currently about $US47 per barrel (as profit),’’ he said.
Nozari also said political issues were casting a ‘‘ shadow of threat’’ on the flow of investment into the oil- producing countries, especially Iraq, Nigeria and Venezuela. ‘‘ If the owners of financial sources do not make a meaningful investment in the oil-rich countries, oil prices will be uncontrollable in the near future,’’ he warned.
Oil prices dipped after striking a record high above $US90 in New York amid global supply jitters and lingering tensions between Turkey and crude producer Iraq.
New York’s key oil futures contract, light sweet crude for delivery in November later closed down 87 cents at $US88.60 a barrel. But the contract had earlier surged to a record $US90.07 beating the previous high of $US90.02 the day before.
In London at the same time, Brent North Sea crude for December delivery settled 81 cents lower at $US83.79 dollars after hitting a record $US84.88 dollars the day before. AFP