Paris (Platts)--14May2007

US energy secretary Samuel Bodman said Monday he hoped that current oil
prices would spur OPEC countries to invest more in upstream production
capacity.
     Speaking to reporters in Paris, Bodman said he hoped that prices "north
of $60/barrel" would be seen by OPEC producers as an opportunity to invest in
the expansion of output capacity, noting Saudi Arabia's stated plan to boost
capacity to 12.5 million b/d.
     In the short term, Bodman said US refinery utilization was set to rise in
the coming weeks to above 90% of capacity as plants come back from turnaround.
     Crude prices have not risen as much as gasoline in recent weeks, he said,
in part due to the large number of refinery problems and outages, but
utilization should hit the "low to mid 90s as the summer progresses."
     Bodman said the US had "no intention" of using any of the money earmarked
for the expansion of the Strategic Petroleum Reserve until after the summer
driving season.
     The Department of Energy earlier this month canceled until at least the
end of the summer driving season a series of planned direct purchases to fill
the SPR, which currently contains 690 million barrels but has a capacity of
727 million barrels, saying all the offers it had received were too high and
did not offer a good value to taxpayers.
     Bodman also said he did not expect to see any significant new investment
in Iraq's oil sector until the country's hydrocarbon law is approved.
     The draft hydrocarbon law is currently being debated by experts and 
politicians before being submitted to parliament for approval. Iraqi oil
minister Hussein Shahristani said in early May he was hopeful the law would be
approved by a May 31 deadline.