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OPEC weekly prices keep dropping
(Xinhua)
Updated: 2008-08-11 21:44

VIENNA -- The weekly average prices of the Organization of Petroleum Exporting Countries (OPEC) dropped to a 3-month low of 115.89 US dollars (dpb) last week, the Vienna-based cartel said Monday.

The prices have maintained a downward trend for five trading weeks consecutively and have so far experienced a fall of 22.42 dollars, nearly 20 percent, since the historic high of 138.31 dpb in the first week of July.

Experts pointed out that the drop in prices should be mainly attributed to the temporarily strengthened dollar. The exchange rate of the euro against the US dollar dropped significantly last week from over 1.56 to below 1.50.

Other reasons such as some OPEC member countries' above-quota outputs also led to the decline.

However, the risk of further price hikes had not disappeared, said experts. Being OPEC's second largest producer, Iran's hard attitude on its alleged nuclear programs in the face of tighter sanctions would still be a threat to prices.

Moreover, the conflict between Georgia and Russia over South Ossetia, caused a new geopolitical crisis. International markets have shown deep concern over the safety of oil pipelines in this region and the oil prices started to rebound Monday on the U.S market.

According to a report published by Iran's oil ministry news agency Shana on August 11, OPEC president Chakib Khelil said OPEC members should produce "in the framework of their committed quota."

Iran's oil minister, Gholamhossein Nozari, also warned recently that some OPEC member countries who produced above quota "must bring it under control" if oil prices drop further. He also said OPEC would discuss the issue of abiding by output quotas in September.