Oil above $60/bbl risk to world economy, oil output growth: Shell

London (Platts)--21Nov2005

Oil prices above $60/bbl threaten to spark a global economic downturn
capable of curbing future oil output growth and to dent oil demand and push
consumers to use alternative energies, Shell's upstream chief Malcolm Brinded
said Monday.
     Speaking at an oil technology conference in Doha, Brinded said that
although the global economy coped well with oil prices around $40/bbl in 2004,
there is an "increasing risk" that government policy changes and consumer
choices would hit demand for oil and gas.
     "If that happens, we could see significant downward pressure on prices
emerge, just as the world needs increasing investment to meet the expanding
demand for energy," Brinded told the conference,
     "And, as we saw after 1998, even when such an economic downturn is
short-lived, the impact on investor confidence and future upstream investments
can be prolonged."
     West Texas Intermediate crude traded on New York's NYMEX fell below
$60/bbl on Nov 8 for the first time in over three months, due mainly to a mild
start to the winter in the US and Europe. Front month January WTI futures
stood at $58.12/bbl at 1155 GMT Monday.
     The fall from an all-time high of $70.85/bbl on Aug 30 was also sparked
by signs that high prices were curbing demand for fuels in the US, the world's
biggest energy consumer.
     A number of economists and market watchers have warned, however, that
tightening world supply and demand fundamentals could push oil prices higher,
with some speculating that prices could reach $100/bbl within two years.

For more oil news, request a free trial to Platts Oilgram News at
http://www.platts.com/Request%20More%20Information/

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.