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Irish Independent: Oil consumers and producers talk – but will they listen?

Apr 24th, 2006
by admin.
Oil consumers and producers talk – but will they listen?
Irish Independent; Apr 24, 2006

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THE world's oil producers and consumers agreed yesterday that record $75-a-barrel crude was a danger to everyone, but appeared further apart than ever in their quest to bring prices down.

“The two are moving in parallel but there is no meeting point,” OPEC president Edmund Daukoru told reporters on the second day of global energy talks in Doha.

Oil raced to an all-time high last week as Iran continued to defy world pressure to halt its nuclear programme, a quarter of Nigeria's output lay idle after rebel attacks, and Iraq's once considerable oil industry was mired in crisis.

Revolution

Consuming nations – from top energy user the US to poor African nations – are afraid high energy costs will damage their economies. Europe's Energy Commissioner Andris Piebalgs said today's oil prices were destroying EU growth.

Producers fear a disastrous collapse in oil demand.

But there are splits over how to pull prices away from their inflation-adjusted high of above $80, touched in 1980, the year after the Iranian revolution.

Consumers want more oil, while producers want to be sure investing in new fields will pay off. Both sides criticise major oil firms for failing to build new refineries to keep pace with booming demand for motor fuels.

“Everyone is protecting their own interests. Nothing is going to change at all,” said energy analyst John Hall.

The meeting brings together ministers from 65 countries, including the US and members of the Organisation of the Petroleum Exporting Countries (OPEC). The chief executives of Chevron, Exxon Mobil, BP, Royal Dutch Shell and Occidental were also present.

OPEC will meet informally here today, but few expect any change to its 28 million barrels per day output limit.

The group that supplies over one-third of the world's oil is already pumping as much as refiners can process.

Refineries

A Kuwaiti suggestion that OPEC should offer its spare capacity of at least 2 million bpd drew a lukewarm response from other ministers.

OPEC members point out they have raised oil output by over 10pc since 1999. Saudi Arabia alone will spend $50bn over the next five years on new fields and refineries.

In contrast, the US, which uses 25pc of the world's oil and over 40pc of its gasoline, has not built a new refinery on its soil for decades.

The introduction of new, cleaner gasoline in the US may hit suppplies.
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