IEA worried over oil supply
PARIS (AP) - May 22, 2008 The International Energy Agency is studying depletion rates at
about 400 oil fields in its first-ever study of world oil supply,
said chief economist Fatih Birol.
"We are entering a new world energy order, " Birol told The
Associated Press.
Market analysts call the Paris-based IEA the world's most
reliable independent source of oil information, and its new
forecasts are likely to further upset markets. Oil prices hit an
all-time high Thursday above $135 a barrel before falling back.
Birol said the study, which will be released in November, was
prompted by concern about the volatility of world oil markets and
uncertainty about supply levels.
"The prices are very high, and demand did not respond in the
last few years as much as one would have expected," Birol said.
"The growth in terms of production was not great. We did not see
enough investment."
He would not speculate on whether the forecast, which will
predict supplies through 2030, could go sharply downward.
Birol said oil companies and governments have been cooperative
with the IEA experts preparing the report, though analysts were
skeptical that the agency would get a complete picture from
often-secretive oil producing nations.
He said most demand now and in the coming decades will come from
China, India and the Middle East. That is a stark shift from past
decades, when the United States and Europe were demand-drivers.
The IEA is part of the Organization for Economic Cooperation and
Development, which brings together 30 rich nations. It has no links
to OPEC, and its review may challenge the Organization for
Petroleum Exporting Countries' view that the world is well-supplied
with oil.
Gasoline prices sprinted to a new record high overnight ahead of
the Memorial Day weekend. The national average rose above $3.83 a
gallon. Some analysts predict gas will break past $4 as early as
next week.
Oil prices rose to a record $135.09 a barrel in overnight
electronic trading on the New York Mercantile Exchange before
retreating to trade down $1.11 at $132.06 a barrel by afternoon in
New York.
Unlike last year, oil prices are setting new record highs on a
daily basis, pushing gas prices with them.
The fear is that oil producing regions will not be able to meet
future demand.
"The oil investments required may be much, much higher than
what people assume," Birol told The Wall Street Journal in a story
published Thursday. "This is a dangerous situation."