MADRID: The World Petroleum Congress wrapped up yesterday in the shadow of record crude prices, with concern growing about a third oil shock but with little consensus about what to do about it.
After four days of meetings between the leading political and corporate energy bosses here, divisions between consumer and producer countries on what or who is to blame for the high oil prices appeared to sharpen.
Saudi Arabia, the world’s leading oil exporter, expressed concern yesterday about new records for benchmark crude of over $146 a barrel and again said it was committed to dialogue between consumers and producers. Those discussions show no sign of finding a solution to market tension, however, with both sides citing different reasons: consumers are clamoring for higher supplies while producers blame financial speculators and the falling dollar.
“We are concerned about high prices,” Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi said on the sidelines of the meeting, adding that Custodian of the Two Holy Mosques “King Abdullah is leading the effort” for dialogue.
Since the beginning of this week, as an estimated 3,000 delegates gathered here, prices have hit almost daily new records, with comments by Iran’s oil minister that the country would react “fiercely” to an attack stoking tension.
Yesterday, light sweet crude for August delivery added 6 cents to $143.63 on the New York Mercantile Exchange. Earlier in the session, it rose as high as $145.85 a barrel, topping a trading record set the previous day. In London, Brent crude futures rose to a trading record of $146.69 a barrel on the ICE Futures exchange before retreating to $144.48, up 23 cents.
No one was predicting lower oil prices in the near future. “With oil hitting $140, we are clearly in the third oil shock,” declared the executive director of the International Energy Agency, Nobuo Tanaka.
The head of Brazilian oil group Petrobas said that no one should expect a return to low oil prices.
US Treasury Secretary Henry Paulson warned that record oil prices are likely to prolong the world economic slowdown. “I think that the oil prices are a strong head wind and at this level, they have got a high risk that they are going to prolong the slowdown,” Paulson said at a London news conference.
The UN’s top climate change official said that the record prices were positive for the environment.
“I think they are a net positive. First of all you see that through decreasing demand in Europe and North America where people are becoming much more conscious of petrol prices,” Yvo de Boer said.
“High oil prices also improve the competitiveness of renewable sources of energy and make it more interesting to focus on energy efficiency,” he added.