US' Bodman says best to let markets decide oil supply, prices

Singapore (Platts)--20Oct2006

US Energy Secretary Samuel Bodman late Thursday said it was best for oil
producers and consumers alike to allow free markets to determine issues of
supply, demand and price. Bodman was commenting on OPEC's decision at an
emergency meeting in Doha late Thursday to cut crude output by 1.2 million b/d
from November 1.
"Despite the recent downturn in crude oil prices, they remain at
historically high levels, clearly indicating a global demand for petroleum
products," Bodman said in a statement. "And as past experience has shown,
market intervention is not beneficial for producing or consuming nations."
OPEC decided at an emergency meeting in the Qatari capital of Doha late
Thursday that its 10 members bound by output agreements will limit collective
production to 26.3 million b/d effective November 1. This represents a
reduction of 1.2 million b/d from a 27.5 million b/d baseline, which OPEC said
was the actual September production by the ten members.
"Crude oil supplies are well in excess of actual demand, as the
above-average level of crude stocks in OECD countries demonstrates, and...the
over-supply situation and imbalance in supply/demand fundamentals have
destabilized the market," OPEC said in a formal communique issued after the
meeting.
"While US gasoline prices have fallen, crude inventories are high and our
economy remains strong, we must reduce America's dependence on foreign energy
sources, as President Bush has said time and again," Bodman said.
"To do so, we will continue to develop new energy technologies like
cellulosic ethanol and hydrogen, and improve energy efficiency, and we must
expand access to our domestic energy resources in the Outer Continental Shelf
and in ANWR," he added.


 

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