OPEC keeping gas prices high

A top financial and investment forecasting company says the recent
spike in fuel costs in the United States is due mostly to the
"remarkable discipline" of the Organization of Petroleum Exporting
Countries to adhere to production quotas agreed upon last March.

Richard Parker, an analyst and senior editor at Texas-based
Stratfor, told WorldNetDaily that while
most observers didn't expect OPEC nations to remain wedded to production
quotas, "what we've seen is a confluence of interests" in keeping oil
prices high.

"Generally, you see Middle Eastern producers being fairly good about
observing production caps to keep the prices up," Parker said. "You see
others who are outside of OPEC -- or even OPEC members in the Americas
like Venezuela -- break the caps."

Now, however, Gulf producers and producers in the Americas are
enjoying the higher prices because it has enabled most producers to
regain lost revenues when prices were so low during the late 1990s.

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For example, Parker said, "Venezuela has come a long way in trying to
be an activist, a player, in OPEC, and part of that has been observing
these quotas and having been a strong proponent of them all along."

More recently, though, Parker said there may be an emerging
temptation to "bust the caps and, as a result, for the price of oil to
begin to fall."

Iraq in particular, Parker said, is "expected to come online" and
begin producing more oil for sale on the global market.

"Iraq has sufficient capacity to do a lot to the price of oil all by
themselves," he said.

Secondly, he said, a few oil producers have been unable to
participate in the benefits of the current production quotas, and have
failed to profit sufficiently from lower production levels.

"They haven't really reaped the benefits and may be tempted to bust
the caps," Parker said. He said those countries were "probably
Nigeria and Iran."

Because neither of these nations has reaped the same financial
rewards as other OPEC nations, and because they have a history of
breaking production quotas, Parker said that if it happens, "these two
countries are likely candidates."

Parker also said he had not heard anything about reported breakdowns
and labor unrest in Saudi Arabia and other Mideastern nations as the
cause for increased fuel prices in the U.S., "but we'll be taking a look
at it."

"As far as we know, prices are up because OPEC has limited
production," he said. Stratfor has contacts in virtually every corner of
the world to assist the firm in making projections and providing data
for the company to analyze.

In the meantime, Americans all across the country have reported
astronomical fuel prices -- that seem to rise by the hour and by the day
in some areas.

One New York-based WND reader reported gasoline prices ranging from
$1.68 to $2.00 a gallon.

But according to AAA figures, gas prices in the West are the highest,
averaging about $1.36 per gallon, compared to an average price of $1.22
a gallon in the Midwest and about $1.30 per gallon on the upper East
coast. Hawaii has the highest average price in the nation at about
$1.53 per gallon, followed by Connecticut at $1.47, Nevada at $1.444 and
Oregon at $1.437.

OPEC countries recently decided to maintain production quotas, which
have boosted oil prices to around $25 per barrel. The nations reportedly
have achieved about a 90 percent compliance rate, though Iran -- the
coalition's fifth largest producer -- has suggested boosting output to
stabilize prices since mid-December of last year.