Who Can Afford $50 Oil?

At its January 30 meeting, the Organization of Petroleum Exporting Countries (OPEC) suspended its official oil price band of $22-$28 a barrel, signaling that the producer group intends to pursue higher prices. Explaining the move, OPEC president and Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah painted a rosy picture. He said that last year’s economic trends showed that $50 oil or even $60 oil was a price that could be good for both consuming countries and oil producing countries alike. Indeed, the world economy grew by more than 4% last year, a relatively healthy pace. Moreover, U.S. consumers do seem resigned to stomaching higher prices at the pump.