Gazprom warns oil could hit $250
Pastor Dale Morgan
Gazprom warns oil could hit $250
*
* Terry Macalister
* guardian.co.uk,
* Tuesday June 10 2008
The Russians undermined Opec's attempts to talk down the oil market
today by warning that crude prices could almost double to $250 per
barrel within 18 months.
The prediction from Alexei Miller, chairman of Gazprom, came as the
price of oil leaped $2.75 to $137.10 per barrel even though Opec
insisted everyone was already "panicking" unnecessarily and stressed
there were no physical energy shortages.
The soaring value of crude today pushed British wholesale gas prices to
new record highs of 100.75p per therm for next winter deliveries. This
will put pressure on domestic heating bills while the current price of
motor diesel has already reached £1.30 per litre in some parts of the
country.
Gazprom said the higher crude prices it expected would drag gas values
up too. "We think it (oil) will reach $250 a barrel in the foreseeable
future," said Miller insisting that high demand rather than financial
speculation was the primary factor for high hydrocarbon prices, an
argument that runs counter to that put forward by Opec.
The comments came 24 hours after Tony Hayward, the BP chief executive,
said supply constraints were partly responsible for the very high crude
prices so far.
A spokesman for Gazprom, which is also one of Russia's largest crude
producers, expected the price to hit the $250 level sometime in 2009.
The company exports gas to Europe at prices linked to oil products for
historic reasons and Miller said the current gas price was $410 per
1,000 cubic metres.
Analysts said the latest Russian energy estimates were hard to support
and noted they were not backed up with specified research data. "It's
crazy ... maybe they know something we don't," said one.
Abdullah al-Badri, the secretary general of Opec had earlier appealed
for calm, saying the record-high oil price was unbearable and did not
reflect any shortage of supply in the market.
"Really we need some calm. We are panicking too much," Badri told a
global energy summit. "The situation is unbearable as far as we are
concerned. I want to say, there is no shortage now and in the future."
Saudi Arabia, the world's top exporter and Opec's most influential
member, said yesterday it would soon call for a meeting to discuss what
it called unjustified rises in prices.
Badri supported holding such a meeting, which he said might happen
before the next scheduled Opec gathering on September 9. He hoped that
measures could be taken to curb speculation in the oil market, a factor
Opec believes is inflating prices to levels not justified by supply and
demand.
"We are not happy with the current level of price for one reason. It has
nothing to do with the fundamentals," he said.
"Speculators are playing a big role in high oil prices. Also there are
other considerations, the value of the dollar and the geopolitical
situation."
Opec, which pumps about two in every five barrels of oil, was willing to
raise production if needed, although there was no demand for extra
barrels. "Nobody is asking for oil at this time. We are checking with
our member countries. There is no queue for oil," he said.
But there could be queues at British service stations this weekend as
tanker drivers who deliver supplies to the one in ten forecourts
controlled by Shell are threatening to go on a four-day strike starting
this Friday as part of a pay dispute.
Gordon Brown told the public not to panic buy fuel but the department of
business admits that there is likely to be "stock-outs" at some facilities.
"If the strike were to affect other retailers, it would have a more
signficant impact. The government is working with the wider fuel
industry on what could be done to reduce any disruption to the public
and business," said the department which is hoping an Acas arbitration
meeting between the Unite union and the haulage firms will break the
deadlock.