Translated material
According to last year's scenario
Oil rises in price due to speculation around Iran and gasoline shortages
Oil prices yesterday came close to last year's record levels. Yesterday, however, it was not possible to beat the historical maximum of $78.64 per barrel: the cost of August futures for North Sea Brent oil on the London ICE commodity exchange reached $77.4 per barrel. However, during the day, oil futures came close to the historical mark more than once. However, according to experts, new records are a matter of the very near future. Indeed, according to the draft report of the American National Petroleum Council under the US Department of Energy, which appeared in the press yesterday, on the prospects for the development of the energy market, as well as the recently published forecast of the International Energy Agency, the demand for oil in the coming years will significantly outstrip the possibilities for its production. And the market has long been accustomed to prices exceeding $70 per barrel. Thus, according to the forecast of Goldman Sachs, in the fall the price of a barrel of oil in the United States may exceed $90, and by the end of the year reach $95 if OPEC maintains production at the current level.The record level of $78 per barrel was reached in August last year, during the peak driving season in the United States. The reason was another escalation of the international conflict around the Iranian nuclear program. The market was actively speculating on rumors about the possibility of a US military operation against Iran, one of the world's leading oil producers. The excitement, according to experts, was supported by American pension funds, which actively played to increase the price of oil. As soon as the American-Iranian conflict subsided, the price of oil fell sharply in September - in the fall of last year, the price of a barrel fell by more than $20. OPEC intervened in the situation, which in October, in order to stabilize the market, announced a reduction in oil production by 1. 2 million barrels per day. At the beginning of this year, oil prices stabilized at 50-55 dollars per barrel, and began to rise in the spring. Moreover, market participants were then extremely cautious in their assessments, calling the increase only a temporary correction based on political speculation, in particular on the same Iranian nuclear program or hostage-taking in Nigeria.
Now the situation is very similar. The American media is increasingly suggesting that George Bush has already decided to start a war in Iran. Hostages are being taken again in Nigeria. Investment funds, it seems, do not yet intend to withdraw funds from oil instruments. The driving season is in full swing, there is a shortage of gasoline, and reserves of oil and petroleum products are low. As a result, in the last two weeks the price of oil has grown by leaps and bounds: if at the beginning of July it was about $74 per barrel, then yesterday it exceeded $78.
Experts note that in the long term the oil market will only strengthen. At least these disappointing conclusions, writes The Wall Street Journal, are contained in the draft report “Facing the Harsh Reality of Energy,” prepared by the National Petroleum Council specifically for the US Department of Energy. The council includes 175 representatives of the oil and gas business and officials appointed by the Ministry of Energy. So this report, commissioned by the US government last fall, is a fundamental work summarizing the forecasts of both oil companies and independent experts.
The reason for the strengthening of the market is the disproportion between the increase in energy consumption by rapidly developing countries, primarily China and India, and the volume of hydrocarbon production. There will simply not be enough oil in the next 25 years, and as a result, high fuel prices are guaranteed. “It is unlikely that the supply of oil and natural gas produced from conventional sources will be able to meet demand, which will grow by 50-60% over the next 25 years,” the report says. -- The most important factor will be the increase in demand for oil and gas from developing countries. It may outpace the development of new sources and thus contribute to rising prices.” According to researchers, the world is now faced with the need to develop all additional sources of energy - from biofuels and nuclear energy to alternative ways of extracting oil, for example from the oil sands in Canada. As another preventive measure, experts proposed the development of programs to improve energy efficiency, in particular to reduce fuel consumption by cars, increase the thermal insulation of buildings and improve the thermal qualities of building materials. At the end of the report, experts from the National Oil and Gas Council were forced to admit that the modern oil and gas industry in the long term will not be able to satisfy global oil demand, which, according to some estimates, could rise to 120 million barrels per day in 2030 from today’s 84 million. At the same time Traditional production will be able to provide production of only 40-60 million barrels per day. The report emphasizes that although oil reserves are estimated at 13-15 trillion barrels, they are virtually impossible to extract.
The report echoes ExxonMobil's previously published long-term forecast. According to the company, despite the development of alternative sources, oil will remain the main raw material for fuel production in the next 30 years, while global energy consumption will increase by half by 2030 and reach 16 billion tons of oil equivalent. The basis for the growth in energy demand is simple: it is a proportional increase in the size of the world population and world GDP. Moreover, both factors will be provided primarily by countries such as India and China. However, according to the oil and gas company, economic collapse should not be expected from energy shortages. Indeed, if energy prices remain more or less high and modern production technologies are used, world hydrocarbon reserves can be increased to 575 billion tons by developing resources such as bitumen, oil sands and shale, which were previously not considered suitable for use.
Oil shortages, however, are regularly predicted by the IEA. According to experts from this organization, by 2030, global energy demand could grow by 53%, to 116 million barrels, with two-thirds of it coming from developing countries. Last week, the IEA published a forecast for 2008, according to which hydrocarbon consumption could increase by 2.5%, to 88.2 million barrels per day, as well as a forecast until 2012, according to which demand will grow to 97.9 million barrels per day .
By the way, OPEC representatives also spoke yesterday about the growth in oil consumption. According to them, demand next year could rise by 1.6%. However, the cartel indicates that demand for the oil it produces will be reduced in favor of other oil exporters. “The 2008 oil market outlook is moving closer to that of this year: ongoing problems in the refining sector will keep product prices high, and refinery outages will increase pressure on prices, despite a healthy oil market,” OPEC said in its review.