Oil above 130 despite OPEC claiming adequite supplies

Oil prices have reached their highest highs in the last few days and with oil now passing the $130 price level, the voices of $140 are getting higher. Higher prices of oil are believed to be driven by a combination of production worries and tight supplies.

OPEC Secretary General Abdullah al-Badri said on Tuesday that there is no shortage of oil and that the high prices of oil are speculative driven. Under pressure form world leaders, to pump more oil, Badri says that OPEC will not consider changing their production unless warranted by market fundamentals. With stocks going 53 days forward, he said there is not shortage.

One of the main factors supporting the speculative interest in oil, is the weakening of the US dollar. A weak U.S. currency, has made dollar denominated commodities relatively cheap for holders of other currencies.

The dollar slid to a one month low against a basket of currencies on Wednesday as the euro was pushed higher by expectations of higher euro zone interest rates. Speaking to Reuters during a visit to Venezuela, OPEC Secretary General Abdullah al-Badri said the soft dollar was one of the factors that could keep pushing oil higher.