Iranian oil exec says dollar's fall pushes oil up, not supply issues


From Reuters
Sunday, September 20, 2007

TEHRAN, Iran -- An Iranian oil official predicted on Sunday that the price of WTI crude could rise to about $90 per barrel by December if the U.S. dollar continues to lose value, Iran's state broadcaster IRIB's Web site reported.

"If the value of the dollar continues to drop, the price of ... WTI ... will reach about $90 in three months," said Hojjatollah Ghanimifard, international affairs director of the state-owned Iranian oil company.

WTI crude slipped $1.22 on Friday to $81.66 per barrel as traders took profits from near record prices and as worries lingered about a slowdown in the U.S. economy. WTI (West Texas Intermediate) is a benchmark oil grade on the U.S. market.

Ghanimifard said recent crude price rises had no connection with crude oil supply.

"The increase of crude price is not related to the amount of supply. The drop of the dollar's value against the euro is one of the main reasons for the recent rise in the price of crude," he said.

A Reuters poll of analysts showed on Wednesday tight oil supplies, red-hot global demand, and a weakening dollar will boost average oil prices to a record level next year.

Analysts raised their average 2008 oil price forecast for U.S. crude to $67 a barrel as many believe the current rally will continue well into 2008. The forecast surpasses the record average of $66.24, reached in 2006.

Analysts believe prices will peak in 2008 with average U.S. crude prices declining to $62.74 the following year and $59.41 in 2010.

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