Egypt riots add pressure on OPEC with $100 oil

OPEC is under pressure from consumers to boost supply as most of the world’s benchmark crudes surpass $100 a barrel amid political unrest in North Africa and the Middle East.

Oil prices are high enough to “derail” the global economic recovery, Fatih Birol of the International Energy Agency said this week. Saudi Arabian Oil Minister Ali al-Naimi said last week prices nearer $75 would be “appropriate.” 

Goldman Sachs Group Inc. says the Organization of Petroleum Exporting Countries has already raised output.

“OPEC needs to put in more barrels this year, given how strong demand has been,” said Amrita Sen, a commodity analyst at Barclays Capital in London. 

“Above $100 there would be a bit more urgency to increase their volumes, because at the end of the day what they want is more stability.”

Riots in Egypt that have led to concern of disruption to shipments through the Suez Canal sent North Sea Brent above $100 a barrel for the first time since October 2008 this week.

Six of the world’s 10 most-used oil price markers, including Nigeria’s Bonny Light, Malaysia’s Tapis, Indonesia’s Minas and Louisiana’s Heavy Sweet and Light Sweet grades, have breached three digits, stoking speculation governments will struggle to contain inflation as economies recover from the recession.

(Bloomberg)