No More Oil

The price of oil is at an all-time high in nominal terms today: over $44 per barrel.

Part of the reason for today’s increase in oil prices can be found in these statements by OPEC oil ministers:

“The oil price is very high, it’s crazy. [But] there is no additional supply,” said OPEC president Purnomo Yusgiantoro, who is also Indonesia’s oil minister. “Minister Naimi has said Saudi Arabia can increase production, but they cannot do it immediately,” said Purnomo, referring to Ali al-Naimi, oil minister for the world’s biggest exporter, Saudi Arabia.

A Gulf industry source said late last month that Saudi Arabia may boost production to 9.5 million barrels per day (bpd) in August. That output level would be just a million bpd below the country’s full capacity.

Purnomo’s comments echoed those Monday of Algerian Oil Minister Chakib Khelil, who said the Organization of the Petroleum Exporting Countries had done all it could to stop this year’s oil price rally.

“OPEC can do nothing,” Khelil told reporters in Algiers.

Given this, exactly why is it so bad for Kerry to call for greater independence from OPEC on energy matters?