§ Mr. Nelson
asked the Secretary of State for Energy what estimates he has made of likely movements in the price of oil as a result of the appreciation of the United States dollar and production by the Organisation of Petroleum Exporting Countries exceeding its target.
§ Mr. Buchanan-Smith
Since oil is priced in dollars, appreciation of the dollar would be likely to reduce world demand for OPEC oil. If OPEC countries produce more oil than that reduced demand, oil prices, expressed in dollars would be likely to fall. The extent of the fall would depend on the extent of over-production, on oil stocking reactions and many other complex interactions; no reliable estimates can be given.