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BRUSSELS—The head of Opec, the group of major oil exporters, says recent crude price increases are to blame on market fears caused by the crisis in Iraq but not on a drop in output. Opec Secretary General Abdullah Al-Badry said yesterday that Iraq was “still producing as normal,” with 95 per cent of its capacity in the country’s south being unaffected by the violence.
The price for a barrel of Brent crude, the key international benchmark, has risen from a stable level of US$110 held over the past four years to about US$115 following the takeover of some parts of Iraq by Sunni insurgents. Al-Badry says prices are not rising because of supply shortages but because the market is “nervous” and investors are speculating. He adds Opec still has spare capacity.