Wednesday, April 19, 2006

Iran President: Oil prices too low

If three straight days of record-setting oil prices, now above US$72 per barrel was not enough. Iranian President Mahmoud Ahmadinejad said Wednesday that oil was still well below its "real value."

The leader also said that developed countries were gaining the most from high prices. Iran is the world's fourth largest producer of oil and the president's statements are closely watched by those in the industry.

Oil's current rise is blamed on the nuclear standoff with Iran and with supply problems in Iraq, Nigeria and the Gulf of Mexico.

Many countries are worried that prices will continue their upward climb for the forseeable future and are moving toward alternative fuels like biodiesel and ethanol.

Some analysts believe oil will top $80 per barrel during the peak of the summer season.

The reality is that an oil peak is due sometime in the not-too-distant future, and prudent nations will begin preparing for it now. When the peak comes, oil prices have nowhere to go but up.

Supply after the peak will head downward and with the exception of periodic bleeps will continue to go in the same direction unable to meet rising demand.

Iran says oil prices too low


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