Oil prices rise as OPEC sees rebound
Workers operate an oil pump in the fields of Sakhir, Bahrain, in this Jan. 8, 2015 file photo. Oil prices rose Monday after OPEC Secretary General Abdullah El-Badri warned of low investment in the industry. AP
LONDON, United Kingdom – Oil prices rose Monday, reversing earlier losses, after OPEC Secretary General Abdullah El-Badri reportedly warned that the market could surge higher owing to a climate of low investment.
Prices had fallen in early trading as the dollar rallied against the euro after the anti-austerity party Syriza swept to victory in Greece’s general elections.
The dollar jumped to an 11-year high against the European single currency, making dollar-denominated crude more expensive for holders of the euro, dampening demand.
But in late London deals, Brent North Sea crude for delivery in March showed a gain of 20 cents to $48.99 a barrel.
US benchmark West Texas Intermediate (WTI) for March delivery won 59 cents to $46.18 a barrel compared with Friday’s close.
Article continues after this advertisement“Oil prices have rebounded thanks to the magic of an OPEC comment, as the secretary general of the organisation opined that a rebound may be in the making,” said Chris Beauchamp, market analyst at trading group IG.
Article continues after this advertisementEl-Badri said oil prices could reach $200 a barrel, although he did not give a time frame, should producers fail to invest in bringing about fresh supply of crude, Bloomberg News reported.
“If you don’t invest in oil and gas, you will see more than $200,” El-Badri said in an interview,” it added.
Oil was sitting at more than $100 a barrel last June, but has since lost more than half its value owing to a supply glut, boosted largely by robust US production, and weak global demand.
Last November, the Organization of the Petroleum Exporting Countries (OPEC) decided to keep output levels despite the oversupply. Now El-Badri is warning that supplies could become tight as producers fail to invest against a background of low returns.
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