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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (36223)	6/28/2008 11:47:56 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 217648

Iran NIOC Official: Oil Prices May Go Even Higher TEHRAN (Dow Jones)--Both oil producers and consumers are worried about a potential shortage of oil in the years ahead as demand outpaces supply growth, and it is likely prices will go even higher unless the problem of excess liquidity in the U.S. economy is resolved, a top official from Iran's national oil company said Friday. "If there is any panic in production, and it is not due to a shortage today, it is for the future," Hojjatollah Ghanimifard, executive director for international affairs at the National Iranian Oil Co., told Dow Jones Newswires. "It looks like the pace of production in oil-producing countries cannot keep up with the pace of demand increases," Ghanimifard said. "Everyone is worried about the shortage to come." Ghanimifard said current high oil prices - which hit a record $142.99 a barrel Friday afternoon in New York - were rooted in problems in the U.S. economy, including rising inflation, slow growth and paltry returns in other investments such as stocks and bonds. That is driving investors to plow their money into oil, pushing up demand and prices, he said. "Everybody knows that the main reason right now is due to the problems that the economy of the U.S. is faced with," Ghanimifard said, adding that prices won't come down "as long as the problem of the U.S. economy isn't solved." "Due to this huge amount of money liquidity and the amounts of oil that are being exchanged, you will be witnessing prices maybe even higher than now," he added. Ghanimifard, who attended a high-profile meeting of oil producers and consumers in Saudi Arabia last weekend, said some oil-consuming countries are starting to shift away from the view that only actions by the Organization of Petroleum Exporting Countries are ultimately responsible for changes in oil price. OPEC producers have long insisted that there is enough oil on the market and that adjusting production levels won't influence oil prices. "(With) some of the top officials of consuming countries, especially from Europe, you could see that the tone of their speeches and the tone of their language has been different...you could see that they have recognized that the state of the market is not just due to OPEC decisions," Ghanimifard said. Ghanimifard said many officials in their speeches at the Jeddah meeting referred to concerns about diminishing spare capacity - the extra cushion of oil-producing capacity that can be brought quickly on line if necessary. Some officials noted that unilateral sanctions during the past decade against some oil-producing countries crimped investment needed to boost supplies, and the effects are taking their toll now, according to Ghanimifard. Saudi Arabia, in the last two months, announced it will boost output by 500,000 barrels a day to reach 9.7 million barrels a day by July, though that has done little to tame prices. Libya, Algeria and some other OPEC members have questioned Saudi Arabia's move, while in recent days the head of Libya's oil policy has suggested that decreasing output may, in fact, be warranted. "I think that at the moment, none of the statements regarding the decrease of the production or the increase of the production is going to affect the market right away," said Ghanimifard, noting the impact of any change in output would take at least a couple weeks to be felt by the market due to shipping times. Such statements have a "psychological effect and have nothing to do with the reality of the market," he said. "We have to give time for the market to see the effect." -By Roshanak Taghavi, Dow Jones Newswires; +98 919 106 4892; roshanakt@gmail.com