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World faces oil supply crisis -Iran OPEC chief
The world is concerned about the security of energy supply due to the anticipation of a drop in global oil production and a drop in the supply from non-OPEC countries-says Iran OPEC chief.
December 7, 2010 12:05 by Reuters
Iran’s OPEC governor believes the world faces great uncertainties in security of energy supply and that the price of crude is still undervalued and set to hit $100 in the short term.
In an interview with semi-official Iranian news agency Mehr published on Tuesday, Mohammad Ali Khatibi said: “The global markets are close to a crisis of uncertain oil supply.”
“The world is concerned about the security of energy supply due to the anticipation of a drop in global oil production and a drop in the supply from non-OPEC countries.”
When asked how he saw the oil price moving in 2011, he replied: “The supply of oil with at a price of $100 price is quite normal in short term.”
U.S. crude for January touched $89.76 on Monday, a 26-month high.
Khatibi said the increase in the oil price still did not reflect the fall in value of the dollar over recent months.
“At the moment, global oil prices have not increased in a real way compared to previous years. They do not consider the drop of the dollar in the calculations.”
The interview was conducted ahead of a meeting of OPEC oil ministers on Dec. 11 in Ecuador. Several member states have said there is unlikely to be a change in production quotas at the meeting.
“In recent years some of non-OPEC countries have continuously oversupplied the market, but this will not be possible in the coming years because of a drop in production,” Khatibi said.
Characteristically bullish on the oil price, Khatibi said higher prices were needed to enable producer countries to invest.
“One of the solutions for securing oil supply to the market is to increase investments in the upstream oil industry and the price hike in oil will lead to more investment in this sector.”
(Reporting by Ramin Mostafavi; Writing by Robin Pomeroy)