Signs of a nascent economic recovery in the USA and in Europe, the increasing willingness of the OPEC-countries to stick to the quota, and speculations on a possible US military intervention in Iraq, which would consequently result in a restricted oil supply, have led to an unexpected drastic rise in prices for crude oil in the first quarter of 2002. Prices for crude oil had already topped 27 US-dollar per barrel at the beginning of April. In its current weekly report 15/2002 (Wochenbericht 15/2002), the DIW Berlin states that if the situation eases off in the Middle East, prices for crude oil should fall slightly (to 20 - 25 US-dollars per barrel). The Berlin-based institute reasons that this development would be mainly attributable to remaining stocks and the seasonal decrease in oil consumption in the second quarter of the year. However, if the crisis in the Middle East were to escalate, a further increase in prices, even up to over 30 dollars, would become likely.
Prices for crude oil fell by 10 dollars to 18 US-dollars per barrel within three months at the end of last year, because of a weak economic climate. As a result of 11th September, this economic effect was further intensified by a decline in fuel consumption in the air traffic industry. The drop in prices was only stopped at the beginning of 2002 after OPEC, in agreement with the other oil producing countries, announced a reduction in oil production by almost 3% (2 million barrel a day) in order to adjust to the low consumption.
In its report, the DIW Berlin shows that both oil consuming countries and oil producing countries have a strong interest in damping down prices for crude oil. In the past, the OPEC has not really had any success in damping down prices by varying production capacities. The opinion that the oil consuming countries could control the price trend with well directed inventory changes in their stocks is viewed critically by the DIW Berlin, as intervening authorities would, as a precondition, need better information than the markets themselves. However, this would only be possible if oil producing and oil consuming countries co-operated, which, at the moment, seems highly unlikely.