OPEC Weekly Prices Dive below $110

A03786493.jpgTEHRAN (FNA)- The weekly average oil prices of the Organization of Petroleum Exporting Countries (OPEC) dropped to 109.73 US dollars per barrel last week, the Vienna-based cartel said Monday.

The prices have dropped for six consecutive trading weeks by 28.58 dollars after it topped 138.31 dollars in the first week of July.

OPEC said in its monthly report Friday that the eased geopolitical tensions and concerns over slower demand growth amid weak economic signs were the main cause for the steep fall.

Prices dropped by around 20 dollars last month after West softened rhetoric in the dispute with Iran.

Other factors included a steep drop in oil demand in countries of the Organization for Economic Cooperation and Development, the United States in particular, as well as a rebound of the US dollar, the cartel said.

Iran’s OPEC governor Mohammad Ali Khatibi said Saturday that the oil market is oversupplied by at least 1 million barrels a day, so the group was considering reducing its output or keeping it unchanged if demand continues to fall.

Experts, however, have again emphasized the potential risks of US and Israeli war rhetoric against Iran and the armed conflicts in Georgia’s breakaway region of South Ossetia, adding that the upcoming OPEC meeting in September would lead the oil prices to a clear direction.

Analysts view US-led sanctions against Iran and geopolitical factors as among the main causes of the last year hike in oil prices, saying that fears of a new Middle East conflict are behind the new high for oil prices.

Market analysts, specially those from consumer nations, take Bush administration responsible for the price hikes during the last year, saying that these are frequent sanctions and the “rumors of US and Israeli action against Iran circulating in the markets” that affected oil and the dollar.

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