The Organization of the Oil Producing Countries (OPEC) will convene next Wednesday to decide on its next steps regarding oil supply.
OPEC decided last Friday against pumping more oil to the international market, and a few of its key members, including Iran and Venezuela, expressed their opinions that there should even be a cut in production.
Oil prices on Wednesday broke the $100-a-barrel barrier, reaching an all-time high of $102.08.
OPEC’s decision last Friday came despite United States President George W. Bush’s call for an output increase.
The 13-member organization insisted that supplies should not be raised only upon market speculation.
"OPEC, which is looking to act only on fundamentals, does not think it needs to raise or to cut down prices," managing editor of the Dubai-based business website Zawya.com, Yadullah Ijtihadi, told The Media Line [1].
"OPEC, in the past, has had very terrible experiences when they drastically cut oil prices. Oil went down to $10 a barrel as recently as 1998-1999, so they are going to be very reluctant to do so. The message that came out from the Algerian oil minister, who is also OPEC president, Chakib Khalil, is that they don’t see any reason to do so," Ijtihadi added.
Oil prices could go up in the near future to $105-a-barrel, Ijtihadi predicted, making clear, however, that speculation could make the market go in different directions.
Toshio Masuda, a Japanese economic analyst, is also of the opinion that oil prices will go up in the near future.
"Much depends on the U.S. dollar. If the U.S. dollar will go down against the euro and the Japanese yen, then share prices of oil will go definitely up," said Masuda.
As the U.S. economy faces recession, the administration might want to consider improving the efficiency of its energy use, Masuda suggested.
"Japan is the most efficient in its energy use. Therefore Japan, I believe, will not have a big problem when oil prices go up, compared to other nations, especially the U.S.," Masuda added.
The most pessimistic of analysts predict prices could climb as high as $150 in the next few years.