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Oil Rises on Speculation Saudi Supply Increase Won’t Cut Prices
Alexander Kwiatkowski, Bloomberg
Oil rose as OPEC’s president said increased crude production by Saudi Arabia next month won’t reduce prices, which are being driven by the weak U.S. dollar.
Saudi Arabia, the world’s largest oil exporter, will increase production 300,000 barrels a day next month after customers requested more oil. That won’t subdue prices, driven higher by a weaker U.S. dollar, the Organization of Petroleum Exporting Countries’s president, Chakib Khelil, said today.
(19 May 2008)
Brown calls for end to the power of Opec
Patrick Wintour, The Guardian
Gordon Brown yesterday signalled a new determination to defend Britain’s hard-pressed consumers and motorists when he denounced the oil cartel Opec as a scandal and called for the EU and the G8 to break down its control, saying it was holding back the development of the world economy.
It is the first time the prime minister has spoken in such stark terms about the causes of the tenfold rise in oil prices, and it follows a conscious decision to speak up on behalf of voters’ sense of fairness.
Number 10 rejected the view that the huge oil price rise was due to speculation, saying that on the contrary the speculation was a function of signals by Opec, and the lack of balance between supply and demand.
(20 May 2008)
Not Enough Oil Is Lament of BP, Exxon on Spending
Grant Smith and Jim Kennett, Bloomberg
Never have so many oil and gas companies spent so much to produce so little.
That’s the challenge facing Exxon Mobil Corp., Royal Dutch Shell Plc, BP Plc, Chevron Corp., Total SA and ConocoPhillips, which will spend a record $98.7 billion this year on exploration and production, Lehman Brothers Holdings Inc. estimates. Costs more than quadrupled since 2000 as explorers targeted more challenging reservoirs and demand rose for labor and material.
… “The future is going to be very trying for the international oil companies,” said Robert Ebel, chairman of the energy program at the Center for Strategic and International Studies in Washington. “There’s no more easy oil for them. Kashagan is a shining example of the problems they face bringing new oil into play.”
(19 May 2008)
