Price outlook uncertain; supply/demand view precarious:Greenspan

Dubai (Platts)--8Sep2004

Federal Reserve Board Chairman Alan Greenspan said he believed the outlook for
oil prices will remain uncertain despite recent declines off record highs and
the supply/demand balance outlook "precarious" due to long-term insecurity
about global production. 

"Nevertheless, future balances between supply and
demand will remain precarious..the outlook for oil prices remains uncertain,"
Greenspan said Wednesday. Speaking during his economic outlook testimony
before the Committee on the Budget in the US House of Representatives Sep 8,
Greenspan said growing concerns about the long-term security of crude oil
production in the Middle East, along with heightened worries about the
reliability of supply from other oil-producing regions, "led to a pronounced
increase in the demand to hold inventory at a time when the level of world
commercial oil stocks was rising only modestly." He added: "Some of that
increased demand came from investors and speculators who took on larger net
long positions in crude oil futures, especially in distantly dated contracts."

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