TEHRAN: Surplus OPEC capacity is keeping the price of crude down, but oil prices are likely to rise to $80 by the end of the year, Iran’s OPEC governor Mohammad Ali Khatibi said on Sunday, according to news agency reports.
"The average price of OPEC basket crude oil from the beginning of 2010 to now is $76.6, but it is predicted that it will reach $80 by the end of 2010," he was quoted as saying by the students’ news agency ISNA.
"Right now, because of the economic crisis, OPEC is facing a 4-6 million-barrel surplus capacity," Khatibi said, according to the Iranian oil ministry website SHANA. "This will be having a psychological effect on the oil price."
Oil fell for a fifth straight day on Friday amid investor anxiety about the global economic recovery.
US crude’s benchmark front-month contract was down 81 cents, or 1.1 percent, at $72.14 a barrel. On a weekly basis, oil prices were down about 9 percent. Khatibi said he saw demand for OPEC crudes in the second half of 2010 at "more than 30 million barrels".
Total supply from OPEC countries was 29.10 million barrels per day (bpd) in June, a survey of oil firms, OPEC officials and analysts showed.
Khatibi said likely restrictions on future exploration following BP Plc’s disastrous deep-sea oil leak in the Gulf of Mexico would increase costs for producers.
"Because of the problems happening in the Gulf of Mexico, it is predicted that the production cost of crude oil in deep waters will increase," he was quoted as saying by ISNA news agency.
"It is unlikely from now on that they will permit exploration in sensitive areas."