MercoPress. South Atlantic News Agency

OPEC member anticipates 70 US dollars per barrel

Crude prices could reach 70 US dollars per barrel towards the end of the year if current circumstances persist, forecasted Iran Oil Deputy Minister Hadi Najad-Hosseinian during a visit to India.

"Experts anticipate 70 US dollars per barrel, and we believe this could happen towards the end of the year", said Najad-Hosseinian.

Although the Iran official did not specify the type of crude, oil markets Wednesday marked a new record 62,50 US dollars per barrel, an approximately 40% increase in the first six months of 2005.

Iran is the second largest producer of OPEC (behind Saudi Arabia) which has been pumping oil at the highest level in twenty five years.

Analysts said the latest surge can be tracked to a possible decline in US gasoline and heating oil reserves plus the hurricane season in the Gulf of Mexico and production cuts in several US refineries.

Crude prices have been steadily increasing for the last two years because of insufficient refining capacity to keep up with a strong demand from the US and the growing demand from emerging economies such as China and India.

"Each problem, each event, recalls the industry how close to the edge it's functioning", said Deborah White from SG Commodities.

"Refineries have been running a marathon for the last two years and are exhausted. But the marathon is far from over", she underlined.

Meantime Indonesia said it was seriously considering abandoning OPEC permanent membership.

Purnomo Yusgiantoro, Indonesian Minister of Energy and Mineral Resources and former OPEC president said the government named a special team to address the issue.

"It's all being processed. Nothing has been decided yet", said Mr. Purnomo adding that there are "technical and political" issues to be taken into consideration as well as the "advantages and disadvantages" of belonging to OPEC. Indonesia is the only Asian member of OPEC.