OPEC to discuss soaring oil prices

(CNN) -- OPEC ministers are in Riyadh, Saudi Arabia this weekend to discuss the soaring price of oil on the world market.

So far, there has been only the most subtle of hints that the world's leading oil producing nations will raise output to meet the voracious global thirst for crude.

Saudi Arabia's oil minister was said to have suggested the notion of a rise could be discussed at the next meeting in December.

That was after OPEC Secretary-General Abdalla Salem el-Badri all but ruled out any movement on the matter this weekend.

For some, a supply increase can't come soon enough.

Experts have warned that supply doesn't rise to meet growing demand, the price of oil could exceed $100 a barrel.

MME spoke to Manouchehr Takin, a petroleum analyst from the Center for Global Energy Studies ahead of this week's meeting.

Manouchehr Takin: I doubt they would refer to the presence of the market in their formal statement. But they might make a reference that they are not in favor of high prices. They will make a commitment that OPEC is ready to continue supplying enough oil to the world as the market regards. They will also emphasize that the world should not fear a shortage of oil.

John Defterios: Let's assess the market. We have seen a 20 percent gain since September. How much has that to do with supply and demand and how much about tensions in the Middle East surrounding Iran, Turkey or Iraq?

MT: It's difficult to say. But quoting a few people that have been brave enough to talk and give numbers, it could be $15-20 because of these effects. But I reverse my comments and say there is nothing new in the last two to three months: political situations in the north have been with us and supply and demand has been with us.

We are going towards winter and inventories have been low over the summer period and that pushes the price high.

JD: Also the lower dollar is a factor. Oil is priced in dollar and the amount of hedge fund money, investment money coming into the oil market as a play against inflation - they want to enjoy the rise of oil. But is it as simple as that?

MT: It is not only speculators, huge funds of pensions and others in the last 2-3 years. Because of the lack of performance of the stock market they have been buying commodities and oil. They had the perception that the price of oil would be high, so they took these high positions and that accentuates the rise in the price.

That is the point: these funds cannot make the price go up by itself. Fundamentals should support the upward trend of price and then these funds accentuate the increase. The funds make the market and the price go up more steeply.

JD: The psychological barrier of $100 a barrel, how important is it?

MT: It doesn't have real significance as far as the market is concerned. But like everything else, it has a psychological impact. In fact it could be because of this $100 fear that players begin to think whether they should bet even more on this one.

And the actual OPEC policy makers they might think for public relations and image of OPEC that maybe it is not a good think to let prices go above $100 and do something to bring it down.

But these are only speculations of what could happen. The price could go up and it could come down. E-mail to a friend