World oil demand currently outpacing supply:
US' Abraham
London (Platts)--20May2004

World oil demand is currently out-pacing supply, US energy secretary Spencer
Abraham said Thursday, voicing his concern that high oil prices could harm
global economic growth. There is "clearly a growing level of demand over a
fairly lengthy period of time," Abraham told reporters in London. "Markets are
very tight because demand is outpacing supply levels," he said, adding that
this was "a major component of the [high] price of oil." "There may be other
factors but we believe the issues of supply and demand are central to the way
the market is behaving," he said, speaking after giving a speech at the Royal
Institute of International Affairs. Abraham said the US administration of
President George W Bush was "deeply concerned" about the impact of high
prices. "High energy prices could have a major potential impact on the growth
of the world economy," he said. From London Abraham is due to travel to
Amsterdam to attend this weekend's International Energy Forum, a biennial
meeting of the world's major energy consuming and producing countries.

While in Amsterdam, Abraham has planned bilateral talks with the oil ministers
of five OPEC countries--Indonesia, Kuwait, Qatar, Saudi Arabia and the UAE.
Abraham, who is expected to press the OPEC ministers to boost oil output to
bring down surging crude and gasoline prices, said he welcomed the
"opportunity to convene in Amsterdam and have a very open discussion."
"Producers and consumers do better in a growing world economy," he said. Asked
to comment on whether he thought OPEC had abandoned its official price target
of $22-28/bbl in favor of higher oil prices, Abraham said he took OPEC
countries seriously when they said the $22-28/bbl band still applied. OPEC
ministers are expected to meet in Amsterdam to discuss a proposal put forward
earlier this month by Saudi oil minister Ali Naimi for output quotas to be
raised by at least 1.5-mil b/d to ease high oil prices. In addition to the
informal discussion in Amsterdam, OPEC is due to convene a formal ministerial
conference Jun 3 in Beirut.

This story was first published in Platts real-time news and market reporting
service Platts Global Alert
(http://www.platts.com/Oil/Real-Time%20Information/Global%20Alert/ ).

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