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Gold/Mining/Energy : Lundin Petroleum LUPE Sweden -- Ignore unavailable to you. Want to Upgrade?

To: Tomas who wrote (595)	9/8/2004 9:38:54 PM
From: Tomas	Respond to of 646

Despite Price Slide, Analysts Raise Oil Price Forecasts Dow Jones Newswires, September 08 by Spencer Jakab NEW YORK - Even with energy prices sliding sharply in the last month, some Wall Street analysts are stepping up to the plate with higher forecasts as they begin pointing to some permanent shifts in the market. U.S. oil prices are off about 12% from their August peak, but soaring prices so far this year have stayed several steps ahead of normally cautious Wall Street analysts, one reason why forecast increases are coming on the heels of such large price drops. A quick look at consensus shows how out of tune some forecasts have become. The First Call average of oil price forecasts by Wall Street analysts is $36.11, nearly 7% below the average price year-to-date of $38.52 a barrel. Prices would have to drop an unprecedented $11 a barrel, or 25%, overnight and stay there until the end of the year in order to converge with consensus. The average forecast for 2005 is just $29.92, which assumes that prices will be 30% lower on average than they are today - a more plausible projection, but one that assumes resolution of soaring global demand and tight supply. As the fourth quarter rapidly approaches, analysts are making up for the gap between past predictions and present reality. Credit Suisse First Boston last week raised its 2004 price forecast for WTI crude by $2.65 to $35.40 a barrel and its 2005 forecast by $2 to $27 a barrel. Raymond James, which has long been more bullish than consensus in its oil and gas price forecasts, is once again diverging sharply from the pack following an update to its forecasts Tuesday. Their 2004 average price forecast is being raised $1 to $38.94 a barrel, assuming that prices will average about $40 in the fourth quarter and that they will be able to stay at that relatively high price throughout 2005. This is a $6 a barrel, or 17.6%, increase in their 2005 full-year oil price forecast. More significantly, analysts are raising their long-term oil price forecasts well above what have been traditionally considered equilibrium levels. CSFB last week raised its long-term forecast for WTI oil to $30 a barrel from $23 previously - and Raymond James, with its more bullish starting point, raised its long-term price forecast to $35 from $30. "Our increasing optimism about longer-term oil prices stems from the fact that the world has seen a major tightening in the global supply/demand equation for oil," wrote the Raymond James team. "As rising demand, particularly from China and India, has outpaced non-OPEC supply increases, the resulting increase in OPEC production has left the world with an extremely low level of excess production capacity." More than changes to forecasts for this year and the next, such long-term boosts to oil price assumptions could have a substantial impact on investors' valuation of energy companies and the capital spending plans of the companies themselves.

To: Tomas who wrote (595)	9/9/2004 8:03:38 AM
From: Tomas	Respond to of 646

Wall Street Journal: Demand for Oil Could One Day Outstrip Supply The Wall Street Journal, September 09 By BHUSHAN BAHREE, Staff Reporter NEW YORK -- A respected oil-forecasting group predicted that the energy industry may be unable to produce enough oil to meet projected demand by the end of the next decade, in a study that lends support to a small chorus of analysts who warn that a peak in petroleum output is looming in the years ahead. In a presentation yesterday, analysts from Washington-based PFC Energy warned that the world won't be able to produce more than 100 million barrels of oil a day, only some 20% more than current output of about 82 million barrels a day, and well below demand projections for the end of the next decade. "Even production of 100 million barrels a day can only be sustained for a few years," said Roger Diwan, a PFC analyst. "Every year since the 1970s, we have been consuming much more oil than we have been discovering." The world's energy appetite has become a hot issue this year as prices have soared on the back of growing demand in China and a series of supply outages, notably in war-torn Iraq. A small number of oil analysts have been predicting a peak in oil production, though they remain in the minority, with most oil companies insisting the industry will be able to meet future demand. Predictions of a peak in oil output often spike during times of oil prices -- most notably during the oil shocks of the 1970s -- but have so far been proved wrong, as exploration and production technology have enabled oil companies to keep the world sated. After a country-by-country study, PFC concluded that if oil consumption continues growing strong, at a pace of 2.4% annually, even the Organization of Petroleum Exporting Countries' huge reserves would be insufficient to meet global demand as early as the middle part of the next decade. Its more optimistic scenario of 1.8% demand growth showed only a little more leeway, with global consumption outstripping output in the latter part of the next decade. Oil demand this year has been unusually strong. According to the latest data from the Paris-based International Energy Agency, demand is on track to grow by 3.18% to 82.16 million barrels a day. PFC's study shows that production in non-OPEC countries, with the exception of the former Soviet Union, has been stagnant and likely won't grow through this decade. It will peak just after 2010, and then begin a long-term decline, the study found. OPEC will then have to pick up the slack and also meet rising demand. PFC projected output in the former Soviet Union countries will peak at some 14 million barrels a day, up from a little over 11 million barrels a day currently, by the end of this decade. Output will then decline in the next decade. PFC concluded that the limits to global oil production will mean that demand for oil will have to be curbed, and alternative sources of energy found. Herman Franssen, a former chief economist for IEA who is now president of an energy-consulting company, said the conclusions essentially tell policy makers that "they have a decade to put our house in order; for instance, it takes that long to retool the car industry" to use another fuel.