What else is driving oil prices up?

A gas nozzle in the fuel port of a car.

TEXT OF INTERVIEW

Scott Jagow: But the same old, same old continues for oil and the dollar. Oil's still close to $110 a barrel. The dollar keeps getting weaker against other currencies. The two are directly related -- oil is traded in dollars, and the dollar's weakness is a big reason oil is so high. But depending on who you ask, there are other things at work here.

Our correspondent Stephen Beard joins us from London. What else is afoot with oil prices?

Stephen Beard: There is, obviously, an issue of supply and demand. Now there's been an argument for some months now that a lot of the output pressure on price of oil has been a result of speculation, hedge fund activity. And that certainly is what OPEC believes -- OPEC last week refused to step up production, because they say this increase in price is financial, it's got nothing to do with the market. But the International Energy Agency says speculation is by no means the main factor -- actual demand is rising and high oil prices are here to stay.

Jagow: But isn't OPEC a bit afraid of oil prices going too high?

Beard: Yes, certainly. OPEC has the experience of the late 90's, when there were high oil prices and it succumbed to the arguments of the West that it should pump more oil. It did so -- that coincided with the big turn in the Southeast Asian economies, and the price collapsed down to $10 a barrel. So it certainly doesn't want to see a high price of oil provoking a global slowdown, which will hit, massively, demand for oil. But it doesn't believe the world is at that point yet. It certainly thinks there's enough demand in China, India and other emerging markets not to increase supply.

Jagow: Ten dollars a barrel. Mmm, that was a long time ago.

Beard: The good old days.

Jagow: All right, Stephen Beard in London, thank you.

Beard: OK, Scott.

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