24 March 2011 00:55 [Source: ICIS news]
HOUSTON (ICIS)--Crude oil prices will likely hover around $100/bbl through 2015 because non-OPEC nations cannot increase production fast enough to meet rising demand, the president of an energy consultancy said on Wednesday.
"We're in for a very rough time," said Bill Sanderson, president of Purvin & Gertz. "We are in a period where we will see strong oil prices as long as the economy continues to grow."
Sanderson made his comments during CMAI's World Petrochemical Conference.
Overall, demand for gasoline in the developed world should remain flat in the upcoming years, Sanderson said. Governments are mandating ethanol blending, and consumers are buying more fuel-efficient vehicles.
However, diesel and gas oil demand will continue to increase, reflecting higher commercial activity, Sanderson said.
Refiners will likely increase distillate production at the expense of gasoline to meet growing demand, he said.
In developing nations, demand for refined products should continue growing because more people are driving and because incomes are growing, he said.
In Japan, demand could rise as the nation turns to petroleum to replace nuclear power-generation, he said.
Regarding production, output should increase in non-OPEC countries, led by the former Soviet Union, he said.
However, that higher production is not enough to meet higher demand, Sanderson said. As a result, OPEC nations will need to increase production to meet demand.
Turmoil in the Middle East and north Africa could also pressure oil prices.
Oil is a crucial feedstock for several commodity chemicals.
Reformers produce xylenes and benzene. Propylene is produced in fluid catalytic crackers (FCC).
However, North American producers rely on natural gas liquids (NGLs) as feedstock for ethylene. As a result, they could benefit from higher oil prices.
The CMAI conference lasts through Thursday.
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