Oil prices are not going to approach 2008’s historic high levels anytime soon. Why? OPEC has got it covered according to the latest media reports.
In an interview with Abdalla Salem El-Badri, secretary general of the Organization of Petroleum Exporting Countries, The Wall Street Journal reports that OPEC has a healthy quantity of spare oil capacity despite the absence of Libya in the equation.
The announcement came just days after OPEC announced it was not going to increase production.
Even as demand increases this summer, and U.S. inventories get tapped out, El-Badri says OPEC has enough spare capacity on hand to cover any shortages.
He said $100 to $110 per barrel was a reasonable price for oil on the world market – just where it is right now in Europe.
In 2008, oil prices reached $147 a barrel and helped fuel a global economic downturn that included a recession in the U.S.
Speaking of the U.S., futures for light sweet crude on the New York Mercantile Exchange were trading just shy of $98 per barrel at midday on Wednesday, June 15. That’s down about $1.60 overnight.