Current high oil prices to take 'many years to solve': US' Bodman
Paris (Platts)--3May2005
US energy secretary Samuel Bodman Tuesday said current oil prices were a "global problem" that had taken many years in the making and would undoubtedly take years to solve. Bodman who was attending the International Energy Agency ministerial meeting in Paris also said prices at $50-55/bbl should encourage more investment in the oil sector and in refining capacity but warned OPEC that it was not in its long term interest to maintain high prices. "It is not in their interest to have a very high oil price if the net result is to create economic chaos and recessions but ultimately they will call for a decline in demand for oil and a corresponding drop in prices," he said. Expectations that OPEC supply may not be able to accommodate increase demand, a lack of spare capacity, soaring demand in China and India, and geopolitical risks in key producers Venezuela and Nigeria as well as the continued insurgency in Iraq have contributed to record high prices this year. Consuming countries have criticized producers for failing to increase investments to boost the global supply cushion and increase refining capacity. This story was originally published in Platts Global Alert http://www.globalalert.platts.com
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