OPEC Nations High Record Windfalls Distorting U.S. Interest Rates

The oil revenues of the Organisation of the Petroleum Exporting Countries, the cartel that controls 40 per cent of the world's oil supplies, will increase by 10 per cent to a record $522bn this year, the US Department of Energy forecasts. Opec's increased wealth, driven by continuing high oil prices and an increase this year in the group's production, should help keep interest rates low if members of the group continue to spend their increasing wealth in the US bond market, economists said. The yield of the 10-year bond has remained nearly flat since mid-2004 in spite of the Federal Reserve increasing official interest rates by 3.25 percentage points during that period.