Oil supplies to remain tight in 2008 - US agency

11 December 2007 17:37  [Source: ICIS news]

TORONTO (ICIS news)--Short-term global oil markets will likely remain tight as oil demand will grow much faster than oil supply outside of the Organization of Petroleum Exporting Countries (OPEC), leaving OPEC and inventories to offset the resultant upward pressure on prices, the US Energy Information Administration (EIA) said on Tuesday.


“However, at last week’s meeting in Abu Dhabi, OPEC decided to maintain its existing production quotas, noting that, in its view, the global oil market continued to be well supplied,” the EIA - the statistics arm of the US Department of Energy - said in its latest short-term energy outlook.


Additional factors that would keep prices high and volatile through 2008 included ongoing geopolitical risks, inventory tightness among Organization for Economic Cooperation and Development (OECD) nations, and worldwide refining bottlenecks, the agency added.


The price for West Texas Intermediate (WTI) crude averaged more than $85/bbl in October and almost $95/bbl in November, up $27 and $36 per barrel, respectively, from a year earlier. 


“The $80-plus per barrel projected crude oil prices are likely to result in historically high prices for the major petroleum products,” the EIA added.


On the other hand, US natural gas storage was at a relatively high level of 3,440 bn cubic feet (bcf) as of 30 November, meaning that while petroleum product prices were expected to increase and remain historically high, only moderate gains were expected for natural gas prices through 2008, the EIA said.


The full report is available on the EIA’s website.

By: Stefan Baumgarten
+1 713 525 2653

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