- Joined
- Sep 25, 2007
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- 201
Hi all,
An article from the July 2nd edition of the Globe and Mail (Report on Business). Excerpts:
The world economy is staggering under a "third oil shock" and can expect little respite from sky-high crude prices over the next five years, the International Energy Agency (IEA) said yesterday.
But those high prices will not spur enough new supply, nor force enough reductions in demand to provide significant relief to hard-pressed consumers and businesses.
Existing oil fields worldwide are being depleted faster than had been believed, the agency reported, and it now requires an additional 3.5 million barrels a day of new production each year just to replace that decline.
The IEA also rejected the widely held view that speculators are driving crude oil markets to new heights, though it applauded efforts by U.S. regulators to improve transparency in futures markets.
"Blaming speculation is an easy solution which avoids taking the necessary steps to improve supply-side access and investment, or to implement measures to improve energy efficiency," the report said.
Global producers are operating full out to keep up with surging demand, and new supplies have been slower coming to market than anticipated, it said. The resulting fundamental market tightness is driving prices.
Despite record prices, global demand is expected to grow by an average of 1.6 per cent over the next five years, with 90 per cent of that growth coming from emerging markets and 45 per cent of it in China and India alone.
On the supply side, the IEA said it has revised downward its forecast for both non-OPEC supply and additional OPEC capacity, because of project delays and accelerated declines in existing fields.
http://www.theglobeandmail.com/servlet/sto...Story/Business/
Keith
An article from the July 2nd edition of the Globe and Mail (Report on Business). Excerpts:
The world economy is staggering under a "third oil shock" and can expect little respite from sky-high crude prices over the next five years, the International Energy Agency (IEA) said yesterday.
But those high prices will not spur enough new supply, nor force enough reductions in demand to provide significant relief to hard-pressed consumers and businesses.
Existing oil fields worldwide are being depleted faster than had been believed, the agency reported, and it now requires an additional 3.5 million barrels a day of new production each year just to replace that decline.
The IEA also rejected the widely held view that speculators are driving crude oil markets to new heights, though it applauded efforts by U.S. regulators to improve transparency in futures markets.
"Blaming speculation is an easy solution which avoids taking the necessary steps to improve supply-side access and investment, or to implement measures to improve energy efficiency," the report said.
Global producers are operating full out to keep up with surging demand, and new supplies have been slower coming to market than anticipated, it said. The resulting fundamental market tightness is driving prices.
Despite record prices, global demand is expected to grow by an average of 1.6 per cent over the next five years, with 90 per cent of that growth coming from emerging markets and 45 per cent of it in China and India alone.
On the supply side, the IEA said it has revised downward its forecast for both non-OPEC supply and additional OPEC capacity, because of project delays and accelerated declines in existing fields.
http://www.theglobeandmail.com/servlet/sto...Story/Business/
Keith