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While OPEC often finds itself the usual suspect when it comes to high crude oil and gasoline prices, it is not behind the current inflation trend, OPEC Secretary General Haitham Al Ghais said on Wednesday.
"There are other factors beyond OPEC that are really behind the spike we have seen in gas [and] in oil. And again, I think in a nutshell, for me, it is underinvestment — chronic underinvestment," OPEC's new Secretary General told CNBC's Hadley Gamble.
The new Secretary General's denial that the group is responsible for inflation comes alongside OPEC's need to portray the group as having great influence over the market. But according to Al Ghais, the crude oil price spike goes beyond OPEC—instead, Al Ghais attributed rising prices of crude oil and gasoline to underinvestment, or rather, "chronic underinvestment."
Al Ghais relayed his solution to high oil prices to Gamble: "This is the harsh reality that people have to wake up to and policymakers have to wake up to. Once that is realized I think then we can start to think of a solution here. And the solution is very clear. OPEC has a solution: invest, invest, invest."
Again threading the needle between discounting its influence on oil prices while showing strength in its influence over the market, OPEC warned after the last OPEC meeting that there was a severely limited availability of excess capacity, and the group, therefore, needed to use what spare capacity it had with great caution.
OPEC+ raised its production target for September by just 100,000 bpd, although it is still undershooting its production quotas by millions of barrels per day.
Oil prices on Wednesday regained some of the lost ground from earlier in the week, with Brent recovering to $92.92 per barrel.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.