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Crude tops $119; Saudi Arabia pledges $90 billion to lift supply
Bloomberg News and Reuters via International Herald Tribune
As oil prices hit a fresh record Tuesday, the Saudi Arabian oil minister Ali al-Naimi called for more investment to increase world oil production capacity.
The minister said his country, the world’s top oil exporter, was “working hard” to ensure the crude market is adequately supplied.
“Limited capacity along the entire supply chain is the real source of current global supply tightness and represents the greatest threat to ensure adequate energy to fuel future economic growth,” Naimi said in a speech at the International Energy Forum in Rome.
The price of crude oil has doubled in three years.
(22 April 2008)
Ineos refinery strike could shut-in 700,000 bpd of North Sea crude oil – BP
Thomson Financial via CNN Money
The looming strike at the Ineos Grangemouth refinery in Scotland could reduce North Sea crude output by as much as 700,000 barrels per day (bpd), a British Petroleum spokesman said on Tuesday.
… A full-shut down of the refinery would mean the closure of the BP owned Forties Pipeline System, which carries 700,000 bpd of North Sea crude oil to the United Kingdom through the Ineos plant.
(22 April 2008)
The Oil Drum is watching the story develop here.
Oil producers, consumers lock horns over prices at forum
AFP
The world’s oil producers and consumers, gathering in Rome for the International Energy Forum this week, agreed that the market is well supplied, but held differing views of prices and the investment needed to meet long-term demand.
“We think the current level of production is enough and sufficient,” said Nobuo Tanaka, head of the International Energy Agency, which represents the interests of oil-consuming countries.
The Organization of Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world’s oil, agreed.
“There isn’t much OPEC can do,” said Iraqi Oil Minister Hussain Al-Shahristani, rebuffing repeated calls from countries such as the United States to open up the oil taps and alleviate price pressure.
(22 April 2008)
Why oil could hit $180 a barrel
Jim Jubak, MSN Money
Just when crude is becoming more costly to extract and process, producers in three key countries are short of cash. And without that money, recent finds won’t do much good.
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Yikes! Oil at $117 a barrel. It has to go down from here, right?
Wrong. In the short term — say, the next two years or so — we’re looking at bad news about global oil supply that could take the price of a barrel of crude to $180.
Needless to say, today’s $3.50-a-gallon gasoline would look cheap if oil prices hit $180 a barrel. At that price for a barrel of oil, gasoline would cost somewhere north of $5.50 a gallon.
The good news is that’s about the price, experts now say, that would send global consumption tumbling and oil prices into retreat, as drivers scrambled to find ways to conserve.
Of course, experts once thought $3-a-gallon gasoline would lead to a drop in consumption. The latest forecast from the International Energy Agency calls for global oil demand of 87.2 million barrels a day this year. That would be an increase in consumption of 1.3 million barrels a day from 2007 — despite a U.S. economic slowdown and soaring oil prices.
So why do I think oil prices will keep climbing for two more years at least?
A terrible coincidence of geology and geopolitics. Just when oil is getting more expensive to produce, the oil industries in three key countries — Mexico, Russia and Nigeria — find themselves short of cash. And without that cash, oil production in these countries, and global oil production in general, is headed into a decline.
(22 April 2008)
Long article.
Oil’s big issue is investment, not reserves-Naimi
Reuters via Guardian
The world has enough oil to fuel future economic growth, but the energy industry is facing a big challenge to ensure investment is enough to meet future demand, Saudi Arabia’s Oil Minister Ali al-Naimi said on Tuesday.
The world’s top oil exporter and holder of the largest oil reserves is working hard to ensure that the market is always well supplied, Naimi said in a speech to the International Energy Forum.
Limited fuel supply capacity, and not a lack of oil reserves, was the greatest threat to future energy supplies, Naimi said.
(22 April 2008)
