Bodman says little oil producers can do to boost near-term supply

Bodman says little oil producers can do to boost near-term supply

Doha (Platts)--24Apr2006

US Energy Secretary Samuel Bodman, arriving for the start of the
producer-consumer forum in Doha, said Monday that $70/barrel crude oil is
"very disruptive" to consuming and producing nations and both producers and
consumers should do something to ease pressure on oil markets.
"Most responsible leaders would tell you today that they consider prices
too high," Bodman told a small group of reporters in a briefing ahead of
addressing the forum and holding bilateral talks with oil ministers.
But Bodman said there is "little producers can do to increase supply" in
the short term. He said he was satisfied producing nations were doing what
they could to keep the markets well supplied.
"We are in a situation where supply is roughly equal to the demand," he
said. As a result, any decrease in supply, such as in the present case in
Nigeria, cause the price "volatility" now being experienced.
Bodman said that in his talk with officials from producing and consuming
nations at the forum he would emphasize that "we have to find ways of reducing
pressure on the world oil market."
He also stressed the importance of energy security, citing the
disruptions caused in the US by last summer's hurricanes and last month's
attack on the Abqaiq oil facility in Saudi Arabia. Bodman said the US has been
in talks with Saudi Arabia on energy security since that attack.
Asked about Iran's developing nuclear program, Bodman said companies
doing business in Iran encourage Tehran's ambitions and that he would advise
governments against allowing such business to be pursued. But the solution to
having Iran end its nuclear program "resides in diplomatic effort," not in
military action.
He said officials from nearly 60 countries at the 10th International
Energy Forum needed to discuss the common problems of market stability and
transparency. Of particular concern to the US are supplies this summer of
gasoline and diesel fuel, Bodman said.
The US is both moving away from the use of the oxygenate MTBE, which some
see as threat to gasoline supply, and transitioning to ultra-low sulfur
diesel.
The US may "have some problems" with gasoline supply in the US this
summer, Bodman said, citing the potential for outages at individual service
stations as the country relies more heavily on the addition of ethanol.
"It is important not to overreact," Bodman said, when asked if there was
anything the Bush administration could do if supplies run short.
He said he believes ethanol supply will be adequate, but conceded that
there is a logistical issue with the additive, in that it is largely produced
in the Midwest and needed in other parts of the country.
Despite the concerns on supply, the US is not considering calling for
strategic stockpiles of refined products to complement the Strategic Petroleum
Reserve, he said.

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