MercoPress. South Atlantic News Agency

OPEC underlines oil barrel/US dollar “symmetric” link

Chakib Khelil blames financial instability for crude market turbulence

OPEC President Chakib Khelil said on Wednesday world oil prices were still being influenced by factors such as monetary and currency policy in the United States and speculation rather than market fundamentals.

"I repeat that the subprime crisis, combined with a weakening of the dollar and a rising movement of speculation, is behind the big rise in oil prices until July 2008," said Khelil, who is also Algerian Energy and Mines Minister. Khelil was also quoted by Algerian official news agency APS as adding: "From July 2008, there was a symmetric drop in prices because of the strengthening dollar" which a week ago hiked to 1.39 to the Euro, with the oil barrel dropping to 90 US dollars compared to 140 US dollars in July. The weakening of the US currency which again reached 1.47 to the Euro, forced the price of a barrel of oil to jump to 120 US dollars a barrel on Monday, illustrated OPEC president. Khelil said factors behind the weak dollar included speculation and "the US monetary policy, with the recent injection of liquidity by the Federal Reserve Bank to help banks facing difficulties". Oil prices ended a choppy session slightly lower Wednesday, falling below 106 US dollars a barrel on weak US fuel demand. Light, sweet crude for November delivery fell 88 cents to settle at 105.73 a barrel on the New York Mercantile Exchange after rising as high as 109.50. On Tuesday the contract fell 2.76 to settle at 106.61 US dollars. In money markets the US dollar gained slightly against the Euro. The 15-nation Euro bought $1.4652 late Wednesday, down from $1.4721 in New York late Tuesday.