Oil prices have been tearing higher lately, and are now around $85.50 per barrel after bulls took advantage of a surprise drop in U.S. oil inventories.
Oil is well above the $70 – 80 range OPEC has targeted, but OPEC doesn’t yet want to raise output.
Since early March, oil prices have closed above $80 a barrel for all but a handful of days, leading analysts to question whether OPEC is now getting comfier with a higher oil-price plateau preference. That view has been furthered following some OPEC minister comments in recent days that the group may stand pat even if crude moves north of $90 a barrel.
Since last year, most OPEC ministers have had an informal preference for prices to trade between $70 and $80 a barrel, a level seen as helpful to promoting energy investment but without hitting consumer pockets too hard. So far this month though, prices, although off an 18-month peak hit last week, have closed between $84 and $86 a barrel.
But OPEC says it isn’t convinced those prices will persist for a variety of reasons, including excess quantities of unused crude globally. It also isn’t as optimistic about demand as others.
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