North Miami, Florida (PressExposure) June 09, 2009 -- "Sun Worldwide", the Asian-based investment management concern is reportedly restating its faith in the supply destruction argument and its likely effect on oil prices in the months and years going forward.
A source close to "Sun Worldwide" said that the firm is convinced that the bull market in "black gold" is intact and made all the more so by a dramatic reduction in drilling and exploration activity in the last year. This was a result of the plunge in oil prices from a high of $147 a barrel to less than $40 in the space of 6 months.
OPEC, the oil cartel, is set to meet in Vienna this week to decide on production targets. Despite widely-held beliefs that OPEC will leave production levels unchanged, "Sun Worldwide" are thought to believe that the meeting will decide upon a cut to hopefully raise the price.
Although the price of a barrel of oil has risen to over $60, oil producers have to factor in the reduced purchasing power of the US dollars they receive for each barrel said the source. He added that while OPEC was mindful of derailing recovery hopes for the West, it still had a right to achieve a fair price for its product.
The news comes as oil traded over $62 after better-than-expected figures indicated that US consumers were more confident about the outlook for the economy.