Algiers: Oil prices, which reached a new record last week, will keep rising if the dollar continues to fall and if oil producer Iran is attacked, the president of the Organisation of Petroleum Exporting Countries said.
“It's not the supply and demand that is influencing oil prices now, prices go up with the falling dollar and the growing threat of war on Iran,'' Chakib Khelil, who is also Algeria's Oil Minister, told reporters in Algiers on Saturday. “If there is war and the dollar continues to slump prices will go higher and higher.''
Oil jumped as high as $147.27 a barrel on July 11 after the Jerusalem Post said Israeli war planes practiced over Iraq, possibly preparing for a strike against Iran, the second- largest member of Opec.
Crude oil for August delivery rose $3.43 or 2.4 per cent, to settle at $145.08 a barrel at 2:50pm on the New York Mercantile Exchange.
The weakening dollar has bolstered the appeal of commodities as a hedge against the US currency's drop. The dollar declined to within a cent of the all-time low against the euro on concern the US government may be forced to take over mortgage lenders Fannie Mae and Freddie Mac.