In London yesterday the Opec secretary general re-iterated comments made at Davos that oil prices are too low, that $60 to $80 a barrel rather than the current c.$40 prices are needed. Today’s low prices are discouraging investment which would store up problems for the future when demand picked up, he said.
The Gulf Times reported Mr El-Badri also said 35 of 150 drilling projects had been delayed because of falling prices.
El-Badri said it wasn’t clear exactly how much production capacity the 35 projects had been expected to add, but he said the distribution of the postponements was across Opec member countries.
The delayed projects are from among a total of 150 that Opec states have planned to deliver over the next decade.
As a result of the project delays, Opec will not increase production capacity by all of the 5mn barrels a day by 2012 that was previously expected, said el-Badri, without elaborating.
Meanwhile Chakib Khelil, the Algerian oil minister and former Opec president, said the group would cut production again if prices remained below $40. However he said also said he believed that “the drop in demand was likely to end soon”, Bloomberg reports.
Platts reported Mr el-Badri said Opec should reach full compliance before looking at cutting. He said the current compliance level was about 80%, which he described as ‘not bad’.
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- Crude rises as US stimulus package may lead to lower dollar (Bloomberg)
- El-badri says Opec should wait for 100% compliance before considering new measures (Platts)
- UTS rejects Total offer (Reuters)
- Italy’s Eni signs 3 deals with Angola’s Sonangol (Reuters)
- OPEC to cut output at price below $40, Khelil says (Bloomberg)
- Nymex’s Brent share doubles as traders shun banks (Bloomberg)
- Gazprom set to cut output in downturn (WSJ)
- Gazprom gets license for four blocks offshore Vietnam (Platts)
- US urged to save forests to curb climate change (Reuters)
- Iraq considers $200m plan to reverse oil-output decline (Platts)
- Scientists plan emergency summit on climate change (Guardian)
Energy news from the FT:
- BG’s bid turns up heat with rival Shell
Group makes A$796m offer for Pure Energy
- Opec steps up threat of output reduction
Cartel member tells FT that ‘further action’ is possible
- Rio Tinto chief leans towards Chinalco deal
Boardroom split at the indebted mining group
- Trading in Chinalco shares suspended
Move follows senior management reshuffle
- Lex: Rio Tinto
Mining group wedged itself into a hole
- Donors press Congo over $9bn China deal
China’s biggest investment in Africa under pressure
- KIA rethink on Dow Chemical deal
Kuwaitis to back Rohm & Haas move
- Bullion sales hit record in rush to safety
Investors are buying record amounts of gold
- Randgold upbeat on cost outlook
Mining costs are likely to fall
- Anglo Platinum scraps final dividend
Group plans 10,000 job cuts
- Markey pushes climate change legislation
Pressure to rise ahead of Copenhagen summit
- The super-cycle isn’t over yet
Francisco Blanch, head of commodities at BoA, on the credit crisis