Prices for crude oil will probably soon again be levelling out between 22 to 28 dollars per barrel, a price span that is also favoured by the OPEC. However, prices are expected to level off at the upper edge of the span. In its current weekly report 39/2001 the DIW Berlin points out that such a price level may be too high in view of the current situation of the global economy. It is, therefore, also in the OPEC's interest to keep prices as low as possible.
Growth in the demand for crude oil has clearly decreased world-wide since the second half of last year. In the first two quarters of this year the demand for oil had been lower than the supply. The OPEC reacted to the slacking demand by cutting back oil production by 3,5 million barrel. The OPEC thus succeeded in averting a beginning drop in prices. Prices for crude oil had jumped to over 30 dollars per barrel after the terrorist attacks in the USA. OPEC immediately condemned the attacks and promised to fully meet the demand for crude oil, which reassured markets. Yet, the political consequences of the attacks could have an negative effect on the safety of oil supply. Although prices for oil may be high, businesses, households and governments will possibly top up their stocks. The demand for crude oil, which is already seasonally high, would then receive a further impetus in the third and fourth quarter of 2001.
The OPEC can stock, excluding Iraq, about four million barrels crude oil a day. The greatest part of storage capacities is available in Saudi Arabia as the country uses less than 80% of its production capacity. If it comes to a stop of the oil export in some of the oil producing countries such storage capacities are a valuable reserve in the current political crisis. Furthermore, state controlled security stocks in the OPEC countries amount to an additional total of 1,2 billion barrels at present. These reserves suffice to make up possible delivery stoppages.