$US90 cheap, says Iran

The Weekend Australian - Travel - - Resources / Engineering & Mining -

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

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