Richardson begs for more .. oil, that is.!
From the 'globeinvestor' site.
>> Oil Consumers Plead With OPEC, Cartel Power to Grow
10:18 EST Saturday, November 18, 2000
By Richard Mably
RIYADH (Reuters) - Major oil consuming powers piled the pressure on OPEC producers on Saturday to ease high prices that are stunting economic growth but a forum here between the two sides was not expected to produce any immediate relief in the form of extra supplies.
The United States and the European Union said the economic impact of crude prices running at more than $30 a barrel for the past several months was plain to see with supply shortages and further price spikes at risk this winter.
The warnings came as the West's energy watchdog, the International Energy Agency, released a new report forecasting that Middle East OPEC dominance over oil supplies was set to grow rapidly over the next two decades.
U.S. Energy Secretary Bill Richardson led the crusade for oil consuming governments, insisting that OPEC oil exporters were wrong to restrain supply while inventories of crude oil and heating fuel were dangerously low.
"Our view is there is a supply problem. Stocks of crude oil, distillates and heating oil are much too low," Richardson told a news conference. "When oil is more than $30 a barrel, particularly developing countries are hurt. Stock level drops leaves the world vulnerable to spot shortages and price spikes," he added.
European Energy Commissioner Loyola de Palacio said oil prices that have more than doubled this year were to blame for one percentage point of inflation among euro zone countries. She said 0.3 percent of economic growth had been shaved from euro zone growth this year as a result. "We have heard that the oil price is giving bad effects to the world economy, especially in the developing countries and the Asia region," she told reporters.
In Seoul, leading Asian oil importer South Korea said high prices had knocked 3.2 percentage points off its oil demand growth in September this year, after its import cost had almost doubled.
OPEC oil ministers decided last week to refrain from any more oil supply rises this year to better assess the impact of its four hikes this year. Oil exporters are still recovering from a price crash in 1998, which created huge fiscal deficits in their economies and hit investment in oil production.
Kuwaiti Oil Minister Sheikh Saud al-Sabah said pleas from consumers for more oil would go unheeded until OPEC meets again in January. "Output will not be increased before the January 17 meeting. This is not in the pipeline," Sheikh Saud said.
Some OPEC countries, looking ahead to a seasonal demand dip in the middle of next year, have said they want to begin talks on reducing supply despite prices well above their agreed target price of $22-$28 per barrel.
"We believe there should not be production cuts early next year. We believe consideration should be given to increases in production," Richardson said.
Palacio said that despite the discomfort felt in Europe, the EU had made no further progress toward a decision on whether to release strategic petroleum stocks.
IEA SAYS OIL TO STAY KING
While high oil prices have forced oil importing nations to consider ways of reducing their dependence on crude imports, a new International Energy Agency report released here forecasts no escape from reliance on petroleum in the medium term. The Paris-based IEA in its world energy outlook said it saw growing reliance on oil and gas imports over the next two decades with OPEC nations grabbing an increased slice of a fast-growing international petroleum market.
Executive Director Robert Priddle said Priddle said world oil demand was projected reaching 115 million barrels a day by 2020 from 76 million bpd this year, annual growth of nearly two million bpd.
A transport explosion in the developing world and the lack of a subsitute for gasoline and diesel meant efforts to reduce dependence on fossil fuel were likely to fail with oil expected to keep its 40 percent share of primary energy consumption over the next 20 years.
"The projections outlined here point to a fossil fuel future, a continued strong role for oil as a transport fuel and a further expansion of international oil trade," said Priddle. "Governments will need to take much tougher action than has so far been the case if they are to succeed .... in achieving the ambitious environmental goals that some of them have committed themselves to."
Asian tiger economies were forecast accounting for 45 percent of the 39 million bpd of growth to 2020. Oil demand growth in China alone was seen surging by seven million bpd with oil import dependence in the country ballooning to 77 percent by 2020 from 22 percent recently.
Dependence on oil imports in Europe would rise from 52 percent to 79 percent with North American dependence by 2020 reaching 58 percent from 45 percent.
Reliance on Middle East OPEC production would intensify.
"OPEC countries, particularly in the Middle East will be critical for meeting the demand for extra oil," said Priddle.
Oil exports from the Middle East were set to more than double from 17 million bpd in 1997 to 41 million bpd by 2020, the IEA said. <<
It seems to me that Richardson and some other administration officials are out of step with their own advisory agencies, the international energy agencies and reality. The latter being the most important.
Current projections at US Energy Bureau?, show a yearly increase in demand of only 0.6% whereas these people are talking of an annual global increase of over 2%.
The price is going to rise in step with the failure of world supply to meet demand and not on the projected increase in demand within the USA only, which is a bogus figure to start with. The population of the USA, is growing faster than their assessment of the increase in oil demand and their production and consumption of all goods including energy is rising faster than 0.6% by double at least.
There is trouble coming and the longer the USA, as largest consuming nation, puts off doing something about a national energy policy, then the harder the thump is going to be at the end.
Meanwhile load up on energy stocks because the increases in revenues, earnings and cash flows are only just starting. |
