[Mb-civic] Saudis warn of shortfalls as oil hits $61

[Michael Butler]

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Saudis warn of shortfalls as oil hits $61
>By Carola Hoyos and Neil Dennis in London
>Published: July 6 2005 22:02 | Last updated: July 6 2005 22:02
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Oil prices hit new record highs above $61 a barrel on Thursday, driven by
short-term supply fears as the first hurricane of the season threatened
crude production and refinery operations in the Gulf of Mexico.

But private warnings also point to a worsening long-term outllook, with
Saudi officials saying that the Organisation of the Petroleum Exporting
Countries will be unable to meet projected western demand in 10 to 15 years.

At today's prices, the world will need the cartel to boost its production
from 30m to 50m barrels a day to 50m by 2020 to meet rapidly rising demand,
according to the International Energy Agency, the energy watchdog for
consuming countries.

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>Leadership on energy use Œwill curb high oil prices¹
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High oil prices will continue to threaten global economic growth unless the
G8 take the lead in improving energy efficiency, Claude Mandil, chief
executive of the International Energy Agency, said.
Go there
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But senior Saudi energy officials have privately warned US and European
counterparts that Opec would have an ³extremely difficult time² meeting that
demand. Saudi Arabia calculates there is a 4.5m b/d gap between what the
world needs and what the kingdom can provide.

Saudi Arabia has the world's largest oil reserves and will need to bear up
to half Opec's production growth in the next 10 to 20 years, with the rest
mainly coming from Kuwait and the United Arab Emirates.

Saudi Arabia pumps 9.5m b/d and has assured consumer countries that it could
reach 12.5m b/d in 2009 and probably 15m b/d eventually. But a senior
western energy official said: ³They said it would be extremely difficult to
move above that figure².

But European officials hope that energy saving measures could curb oil
demand. They believe Opec could produce the 44m b/d the world would need if
consumers adopted efficiency measures under discussion by governments in the
US and Europe.

G8 leaders are expected to discuss the high oil prices during their three
day summit which began in Gleneagles, Scotland, on Wednesday.
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Oil prices at new high as storms threaten supply
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Fears that US refineries are ill-equipped to meet winter demand for heating
oil and other distillates have driven crude prices more than 9 per cent
higher in the last week.

These concerns were compounded on Wednesday as Chevron, Shell and BP all
reported they were evacuating workers from platforms in the Gulf of Mexico
as tropical storm Dennis was upgraded to hurricane.

These concerns were compounded on Wednesday as Chevron, Shell and BP all
reported they were evacuating workers from platforms in the Gulf of Mexico
as tropical storm Dennis was upgraded to hurricane

The August West Texas Intermediate contract on the New York Mercantile
Exchange hit a record $61.63 in early electronic trade, while on London¹s
International Petroleum Exchange, the front-month Brent crude contract
climbed to an all-time high of $60.26 a barrel.
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