Chakib Khelil, president of OPEC predicted that oil prices will continue to rise.
'The price of oil will rise again in the coming weeks.
And he should probably know whether or not oil prices are going to rise. Looking at the oil market chronology, every time the price of oil starts to decline OPEC lowers production and sends prices skyward again.
But he contends that OPEC supply isn't the cause of high oil prices but instead blames it on factors outside of OPEC's control.
'I believe 60 percent of the rise in the oil prices is due to the fall in the exchange rate of the dollar and to geopolitical problems, and 40 percent to the intrusion of bio ethanol on the market,' he said.
I find his choice of words curious. It sounds like he is trying to say that this is their market and how dare ethanol intrude on their market.
But I really can't see any logical reason as to how ethanol could cause a rise in oil prices. Actually the opposite should be true since increased ethanol production means that less petroleum is needed lowering demand.
Of course he could be trying to say that the 40% is a punishment for trying to lower our dependence on petroleum through the production of ethanol.
Either way I figure that anything that intrudes on OPEC's market is a good thing.