MADRID: Experts remained divided yesterday over the causes of soaring oil prices at the 19th World Petroleum Congress (WPC), one of the top events of the industry, which was inaugurated here one week after a meeting in Saudi Arabia failed to bring prices down.
Oil rose more than $3 a barrel yesterday to a new record above $143, propelled by heightened market fears of conflict between Israel and Iran over Tehran’s nuclear program.
Prices later retreated from session highs, partly reflecting a rebound in the US dollar versus the euro. US light crude was up $1.76 at $141.97 a barrel by 1357 GMT, after a record high of $143.67 a barrel.
London Brent crude was up $1.91 at $142.22.
The congress brought thousands of experts from more than 50 countries, including OPEC head Chakib Khelil, International Energy Agency Director Nobuo Tanaka and energy ministers and oil company executives, to the Spanish capital. The congress ends Thursday.
Spanish Industry Minister Miguel Sebastian said operations in futures markets had increased the demand for crude by 850,000 barrels daily. He called for a “deep market reform.”
European Energy Commissioner Andris Piebalgs also called for more transparency in international markets.
Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi said the Kingdom stood ready to pump as much oil as its customers required, but supply for now was adequate.
Saudi Arabia has already promised to pump 9.7 million barrels per day in July, marking an increase in output of 550,000 bpd since May. “Supply is enough. The price is driven by many, many causes — most of which is speculation,” Al-Naimi said.
Representatives of oil companies, however, downplayed the influence of speculators, attributing the high prices largely to other factors such as increasing energy demand in emerging markets including China and India.
“I don’t think you can blame speculators,” said Royal Dutch Shell chief executive Jeroen van der Veer, while BP chief Tony Hayward denied that the market faced a “speculative bubble.” Oil producers have long blamed high prices partly on market speculation, while consumer countries have attributed them largely to a lack of supplies.
Meanwhile, the commander of the US Navy’s Fifth Fleet warned that the United States will not allow Iran to shut the Strait of Hormuz, the Gulf sea lane through which much of the world’s oil is supplied.
“They will not close it... They will not be allowed to close it,” Vice Admiral Kevin J. Cosgriff told a press conference in Bahrain, where the Fifth Fleet is based.
His remarks followed comments by the chief of Iran’s elite Revolutionary Guards, Gen. Mohammad Ali Jafari, last week that any attack against his country over its controversial nuclear drive would force Tehran to choke oil supplies through the strait.
